Ola Electric is preparing for its initial public offering (IPO) with an expected valuation of around $4.5 billion, a notable decrease from its previous valuation of $5.4 billion during the last funding round. This decline of approximately 16-20% is attributed to a global recalibration of tech stock valuations. In October of the previous year, the company raised $384 million in a funding round led by Singapore’s investment firm Temasek.
Although the final valuation for the IPO is still being determined, sources suggest that it is unlikely to meet the $6 billion target set by Bhavish Aggarwal, Ola Electric’s founder. The ongoing book-building process aims to price the IPO attractively to offer value to investors, indicating a strategic approach to the market conditions.
In December of the previous year, Ola Electric submitted its draft red herring prospectus to the Securities and Exchange Board of India (SEBI) for an INR 5,500+ crore IPO, receiving regulatory approval last month. The company, founded by Aggarwal, is a leading player in the two-wheeler electric vehicle market in India, offering five scooter models and operating an extensive omnichannel distribution network with numerous experience and service centers.
Earlier this year, Ola Electric secured additional funding of INR 410 crore (around $50 million) through non-convertible debentures issued to EvolutionX Debt Capital. As part of its preparations for the IPO, the company has been restructuring to reduce costs and streamline operations, which included plans to lay off approximately 400-500 employees.
Financially, Ola Electric reported a net loss of INR 1,471.6 crore for the financial year 2022-23, an 88% increase from the previous year. Despite this, the company’s operating revenue saw a significant year-on-year growth of 605%, reaching INR 2,630.9 crore in the same period. As Ola Electric moves towards its IPO, it aims to balance its growth aspirations with market realities, seeking to attract investors with a well-priced public offering.