Ola Electric IPO: Open for Subscription on August 2; Valuation Expected at $4.4 Billion

July 29, 2024

New Delhi, India

IPO

Ola Electric Mobility Ltd., which is preparing to go public, has fixed its IPO price band between ₹72 and ₹76 per share, according to an official document. The ₹5,500 crore issue will open for subscription on August 2 and close on August 6.

The IPO includes a fresh issue of equity shares along with an offer for sale (OFS) of up to 8.4 crore shares with a face value of ₹10 each. Promoter Bhavish Aggarwal and investors such as SoftBank, Temasek, and Matrix Partners India are among the selling shareholders.

The allocation of the IPO is as follows:

• 75% reserved for institutional investors
• 15% reserved for non-institutional investors
• 10% available for retail investors

Bids can be made for a minimum of 195 equity shares and in multiples of 195 thereafter. Eligible employees can also bid in the IPO and will receive a ₹7 per share discount on the offer price.

Ola Electric focuses on electric vehicles (EVs) and core EV components, boasting integrated technology and manufacturing capabilities. The company has delivered seven products and announced four new ones. As of March 31, 2024, Ola Electric had 870 experience centres, 431 service centres, and a comprehensive website as part of its omnichannel distribution network.

Despite its growth, the company reported a loss of ₹1,584 crore in the financial year 2024, up from ₹1,472 crore in 2023. Ola Electric plans to use ₹1,600 crore of the net proceeds for research and development (R&D) investments. The company noted in its risk factors that there are no assurances these investments will result in tangible assets or achieve the anticipated results.

The SoftBank-backed IPO will open for retail subscription on August 2, valuing the company between $4.2 billion and $4.4 billion. Institutional investors will be able to subscribe a day earlier, on August 1. The public issue will close for retail subscriptions on August 6.

Founder Bhavish Aggarwal will offload 37.9 million shares in the IPO, around 20% lower than estimated in the draft IPO prospectus. Ola’s expected valuation is approximately 18.5% to 22% lower than its last funding round in September, which was led by Singapore’s investment firm Temasek and valued the company at $5.4 billion.

Sources told Reuters that some marquee investors are being offered the IPO at the lower end of the $4.2 billion-$4.4 billion valuation range. Ola aims to ensure higher participation from investors by planning the IPO at a lower valuation.

Ola Electric, the first Indian electric vehicle (EV) maker to go public, is launching one of India’s biggest IPOs in a year where the country’s equities markets have reached multiple record highs and surpassed Hong Kong to become the world’s fourth-largest bourse. The fresh share issue size of ₹55 billion for the IPO remains unchanged.