The Business Bytes
New Delhi, June 20, 2024 (TBB Bureau): Bhavish Aggarwal-led Ola Electric has received approval from the Securities and Exchange Board of India (SEBI) for its much-anticipated initial public offering (IPO), marking a significant milestone as the first electric vehicle (EV) startup in the country to do so.
The IPO, as outlined in the draft red herring prospectus, comprises a fresh issue of Rs 5,500 crore alongside an offer-for-sale (OFS) of 9.51 crore equity shares. Within the OFS, Aggarwal plans to divest 4.7 crore equity shares, while the promoter group, Indus Trust, will sell 41.78 lakh shares.
Having filed its draft IPO papers with SEBI in December 2023, Ola Electric aims to raise up to Rs 5,500 crore, inclusive of a pre-IPO placement worth Rs 1,100 crore.
According to details disclosed in the draft papers, a substantial portion of the proceeds, totalling Rs 1,226.4 crore, is earmarked for the capital expenditure of its subsidiary. Additionally, Rs 800 crore is allocated for debt repayment.
The company intends to allocate Rs 1,600 crore towards research and product development, with a further Rs 350 crore designated for organic growth initiatives, as highlighted in the Draft Red Herring Prospectus (DRHP).
On the operational front, Ola Electric has demonstrated its prowess in the electric two-wheeler (2W) segment, securing a commanding 49 per cent market share in May. Notably, its S1 scooter portfolio garnered 37,191 registrations, as reported by the government’s Vahan portal.
