Ola Electric, the electric vehicle startup founded by Bhavish Aggarwal, has garnered approval from the Securities and Exchange Board of India (Sebi) for its Rs 7,250 crore initial public offering (IPO), as per sources familiar with the matter. This milestone positions Ola Electric to become the first Indian EV company to debut on the public market.
Sebi’s approval, combined with a buoyant market sentiment, potentially paves the way for the company to launch its IPO within a month, though this timeline remains unconfirmed. Attempts to solicit comment from the company were unsuccessful.
The IPO is set to include a fresh issue of equity shares worth Rs 5,500 crore, along with an offer for sale (OFS) of over 95 million equity shares valued at approximately Rs 1,750 crore.
Bhavish Aggarwal intends to offload up to 47.4 million shares, representing a 3.48 per cent stake in the IPO. Other selling shareholders include Indus Trust, Alpine Opportunity Fund, DIG Investment, Internet Fund III (Tiger Global), MacRitchie Investments, Matrix Partners, SoftBank Vision Fund, Alpha Wave Ventures, and Tekne Private Ventures. Ola Electric is eyeing a valuation range of $7-8 billion.
Since its foray into the EV segment in 2017, Ola Electric has emerged as a dominant player, capturing over 35 per cent of the market share in FY24. Data sourced from the VAHAN portal indicates a steady rise in Ola Electric’s market share from 21 per cent in FY23.
According to the draft red herring prospectus (DRHP), proceeds from the fresh issue will be allocated towards capital expenditure (capex), debt repayment, and research and development (R&D). The company plans to invest Rs 1,226 crore in capex, allocate Rs 800 crore for debt repayment, and earmark Rs 1,600 crore for R&D. An additional Rs 350 crore will be directed towards organic growth initiatives.