Ola Electric EV maker last raised funds at $5.5 bn value
Industry reports indicate that Ola Electric, the maker of electric vehicles (EVs) backed by SoftBank, is expected to aim for a valuation of roughly $4.5 billion in its impending initial public offering (IPO), which would represent an 18% fall from its latest fundraising round valuation of roughly $5.5 billion.
The persons acquainted with the subject stated that the company, established by Bhavish Aggarwal, plans to file for the IPO by the end of next month.
According to a source, the plan is to price the IPO advantageously for investors in order to promote wealth creation and long-term growth. When reached, the business declined to provide an answer.
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Ola Electric was given permission by the Securities and Exchange Board of India (Sebi) on June 20 to move forward with its plans for an initial public offering (IPO) with the aim of earning Rs 7,250 crore (about $860 million). Ola Electric became the first electric vehicle startup in India to go public thanks to this nod.
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In October last year, Ola Electric announced it had secured approximately Rs 3,200 crore ($380 million) in funding as part of an equity and debt round. The funding was obtained from Temasek-led marquee investors and project debt from State Bank of India, raising its valuation to $5.5 billion from a previous $5 billion, the sources said. However, this valuation is expected to have declined because of shifts in global tech stock valuations.
The funds raised in October last year were intended as a precursor to the IPO, with Aggarwal targeting a $6 billion valuation for the offering.
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Aggarwal plans to sell 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.
The draft red herring prospectus (DRHP) details the allocation of proceeds from the fresh issue: Rs 1,226 crore towards capital expenditure (capex), Rs 800 crore for debt repayment, Rs 1,600 crore for research and development (R&D), and Rs 350 crore for organic growth initiatives.
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Ola Electric manufactures EVs and key components, such as battery packs, motors, and vehicle frames at its Futurefactory in Tamil Nadu, which is being expanded to become the world’s largest two-wheeler factory with an annual production capacity of 10 million units. Additionally, it has established a Gigafactory for Li-ion cell manufacturing in Tamil Nadu, initially with a capacity of 5 gigawatt hours (GWh), which, according to the sources, will scale up to 100 GWh in phases.
The company also operates a Battery Innovation Centre (BIC) in Bengaluru, equipped with state-of-the-art laboratory equipment for comprehensive cell-related research and development.
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