Ola Electric Sets IPO Price Band At INR 72-76, Aims To Raise Over INR 6,145 Cr

EV mobility startup Ola Electric has set a price band in the range of INR 72-76 per equity share for its upcoming initial public offering (IPO), which is opening for bids on Friday (August 2).

The startup is expected to raise over INR 6,145.6 Cr at the upper price band.

Ola Electric’s public offer comprises a fresh issue of shares worth up to INR 5,500 Cr and an offer-for-sale (OFS) component of up to 8.49 Cr shares worth INR 645.6 Cr. The company’s IPO will close on August 6. 

The anchor bidding is starting on August 1. The bid lot of the IPO is 195 shares and in multiples of the same thereafter. 

Its IPO will have 75% allocation towards qualified institutional buyers (QIBs), 10% towards retail, and 15% towards the non-institutional investor (NII) category.

The buzz around Ola Electric’s IPO plans started early last year. In December 2023, the startup filed its IPO draft papers with the SEBI. Initially, the public issue comprised a fresh issue of shares worth INR 5,500 Cr and OFS component of up to 9.51 Cr shares. However, the OFS amount was lowered in its RHP.

Kotak Mahindra, Citigroup, BofA Securities, Goldman Sachs, Axis Capital, and ICICI Securities are some of lead the book runners for its IPO.

Speaking during the IPO launch announcement, Bhavish Aggarwal, founder and CEO of Ola Electric, said, “We don’t focus our energies into ICE or other transitionary technologies like hybrid, etc, but our singular focus is to create the EV future and to create the entire business model, manufacturing ecosystem that goes with it.” 

The EV two-wheeler maker currently leads the market in terms of market share. Aggarwal also highlighted that the startup is aggressively working on its electric motorcycles.

It is pertinent to note that the startup was also planning to launch its electric car. However, reports emerged recently saying that ahead of its public market debut, the startup has kept its e-car plans on hold.

Speaking on this topic on Monday (July 29), Aggarwal said, “We have not made any formal announcement ever, either this way or that way. Our focus is to build the foundations for the EV ecosystem in India. We made a starting point from a product standpoint with the scooter. We are moving to the motorbike. And our immediate focus is on these two-wheeler products and our focus is to build the cell as a foundation layer for any future product, for any company which wants to buy our cells.”

He also reiterated that the company is eyeing exports in the long term. 

While Ola Electric’s IPO is one of the biggest by the Indian startups, the company continues to be a loss-making entity.

Its net loss widened 7.6% to INR 1,584.4 Cr in the financial year 2023-24 (FY24) from INR 1,472.1 Cr in the previous year. Ola Electric’s operating revenue jumped over 90% to INR 5,009.8 Cr during the year under review from INR 2,630.9 Cr in FY23.

Speaking on the profitability aspect, Aggarwal said that the company’s revenue is growing steadily and gross margin also improved in FY24. However, he did not give any timeline for achieving profitability or even EBITDA breakeven.

“If you see manufacturing industries in general, as you grow revenue, you get a lot of operating leverage because your fixed costs don’t scale in line with revenue growth. So, that’s been our story in the last couple of financial years, where as we have grown volumes and we have invested for a higher volume, as we are growing into that capacity, our margins are improving,” said Aggarwal.