Softbank-backed Ola Electric Mobility has set the price band at Rs 72-76 per share for its Rs 6,100-crore initial public offering (IPO), launching on August 2. The trial production of its gigafactory is currently in progress, with operations expected to begin early next year.
The IPO includes a fresh issue of equity shares valued up to Rs 5,500 crore, along with an offer for sale (OFS) of 8.49 crore equity shares by promoters and investors. The offer will close on August 6, with Ola Electric founder Bhavish Aggarwal selling approximately 3.8 crore shares under the OFS.
Investors can bid for at least 197 equity shares, with additional bids required to be in multiples of that amount.
From the IPO proceeds, Rs 1,227.6 crore will be used to increase the capacity of the cell manufacturing plant from 5 GWh to 6.4 GWh, while Rs 1,600 crore will go towards research and product development. Additionally, Rs 800 crore will be allocated for debt repayment, and Rs 350 crore will support organic growth initiatives.
The IPO aims to bolster Ola Electric’s investment in enhancing cell manufacturing capacity and advancing R&D for future technologies and products.
“We have commenced trial production and are thoroughly testing the facility,” stated Bhavish Aggarwal, Chairman of Ola Electric Mobility.
The setup and expansion of the Ola Gigafactory in Krishnagiri, Tamil Nadu, will be funded through internal accruals and long-term borrowings by Ola Cell Technologies Pvt Ltd (OCT). Phase 1 (a) is scheduled for completion by March 2024, with a capacity of 1.4 GWh, and Phase 1 (b) will expand capacity to 5 GWh by October 2024, funded by OCT.
“Our scale is increasing, and operating leverage is improving,” Aggarwal noted, emphasizing the importance of operating leverage for profitability. He highlighted improvements in gross margin and EBITDA margin over the past year and the first quarter of this year.
Revenue has increased by 90 percent over FY23, with volumes continuing to grow, as per the VAHAN portal.
Aggarwal also mentioned the company’s efforts in vertical integration of core components, including cell manufacturing, which constitutes a significant portion of vehicle costs. Starting cell manufacturing in India early next year is anticipated to further enhance margins.
Ola Electric remains focused on long-term success, with a strategy of vertical integration in manufacturing and core R&D in-house, contributing to its market leadership. The company achieved a market share of 35 percent in the last fiscal year and 39 percent in the March quarter of FY24.
Aggarwal expressed optimism about India’s future in new energy, anticipating EV penetration to grow from 4 percent in 2022-23 to around 40 percent by 2030.
Ola Electric aims to lead in India’s new energy sector and support the broader EV ecosystem.
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