Ola Electric is likely to open its initial public offering (IPO) for the public subscription next week — between August 2 and August 6, according to a Moneycontrol report. The Bhavish Aggarwal-owned company is preparing to launch the anchor book on August 1. It is a widely anticipated IPO among investors and its market debut next month will be one of India’s biggest IPOs this year.
It will also become India’s first-ever EV two-wheeler to list on the bourses. According to the Moneycontrol report citing sources, the Ola IPO listing is likely to take place on August 9.
Ola, though still loss-making, has gained a 46% market share in e-scooters in the three years since it was founded.
Ola founder Bhavish Aggarwal already has an e-scooter factory in Tamil Nadu. In 2022, he said he would build a new plant within the same campus with capacity to manufacture 1 million electric cars a year. The cars, he said, would be designed to break the national trend of dull, small or midsized vehicles.
Ola Electric filed its draft red herring prospectus (DRHP) with the market regulator Sebi on December 22, 2023.
Kotak Mahindra Capital, Axis Capital, Goldman Sachs, ICICI Securities, Citi, BofA Securities, SBI Caps and BoB Caps are the investment banks working on the deal. Law firm Cyril Amarchand Mangaldas is the company counsel.
According to draft red herring prospectus, existing shareholders were said to sell 95.19 million shares in the OFS. Founder Bhavish Aggarwal will be selling 47.3 million shares. The firm’s initial investors — AlphaWave, Alpine, DIG Investment, Matrix, and others will also be selling 47.89 million shares via the OFS as per the draft filing with the regulator.
As per the draft papers, Ola Electric will utilise the proceeds for capex, repaying debt, and research and development (R&D).
Aggarwal laid out plans in 2022 to launch an electric sports car with an all-glass roof in two years that could reach 100 km per hour within four seconds. The company has suspended its electric car launch plans as the Softbank-backed company wants to focus on its e-scooter business, according to a Reuters report citing two people with direct knowledge of the decision.
Aggarwal reiterated those plans as recently as September 2023 in an interview with Forbes, but the two sources said the project is now suspended ahead of its planned August IPO, where it is set to raise around $660 million.
Ola’s “focus is all on the two-wheeler market, including bikes, and mass electrification is still some time away – you need to have (charging) infrastructure,” the first source told Reuters.
The suspension of Ola’s plan for electric cars, which could have competed with likes of Tata Motors in the nascent yet fast growing space, shows how challenges such as a lack of charging infrastructure in India weigh on plans.
E-scooters have become popular in the country in recent years and infrastructure has been built fast. Around 483,000 e-scooters were sold this year by June, but that period saw only about 45,000 electric car sales in the world’s third-biggest auto market.
