Ola Electric to Launch IPO on August 2, Aiming to Raise Rs 5,500 Crore for Expansion and Innovation
News Mania Desk/Agnibeena Ghosh/28th July 2024
Ola Electric Mobility is set to launch its initial public offering (IPO) from August 2 to August 6, with anchor investor bidding starting on August 1, according to the red herring prospectus (RHP). This IPO will feature a fresh issue of equity shares worth up to Rs 5,500 crore, alongside an offer for sale (OFS) of 8.49 crore equity shares by promoters and investors. Founder Bhavish Aggarwal will be offloading nearly 3.8 crore shares.
The funds raised through the IPO will primarily be allocated to expanding Ola Electric’s cell manufacturing capacity and advancing research and development for future technologies and products. Specifically, Rs 1,227.6 crore from the public issue will be used to increase the capacity of its cell manufacturing plant from 5 GWh to 6.4 GWh. Additionally, Rs 1,600 crore will be directed towards research and product development, Rs 800 crore for debt repayment, and Rs 350 crore for organic growth initiatives.
Ola Electric’s ambitious expansion plan includes the setup and growth of the Ola Gigafactory in Tamil Nadu. This project will be funded through internal accruals and long-term borrowings secured by its subsidiary, Ola Cell Technologies Pvt Ltd (OCT). Phase 1 (a) of the Gigafactory, expected to be completed by March 2024, will have a capacity of 1.4 GWh. Phase 1 (b) will further increase the capacity to 5 GWh by October 2024. The second phase aims to scale up the capacity to 6.4 GWh by April 2025 and ultimately reach 20 GWh by the second quarter of 2026.
In addition to the IPO and expansion plans, Ola Electric has recently announced a new lineup of electric motorcycles, including models like Cruiser, Adventure, Roadster, and Diamondhead. These are expected to be delivered in the first half of fiscal 2026. The company also plans to launch affordable mass-market Ola S1 models targeting personal, business-to-business, and last-mile delivery segments by the first half of fiscal 2025.
The launch of Ola Electric’s IPO marks a significant milestone for the company as it continues to push the boundaries of the electric vehicle market in India. The funds raised will not only support the expansion of its manufacturing capabilities but also fuel the development of innovative technologies and products. With the increasing demand for electric vehicles and the government’s push for sustainable transportation, Ola Electric is well-positioned to capitalize on these trends.
Moreover, the company’s focus on expanding its cell manufacturing capacity is crucial for ensuring a steady supply of batteries, which are a critical component of electric vehicles. By increasing its capacity from 5 GWh to 6.4 GWh, Ola Electric aims to meet the growing demand for its products while also advancing its research and development efforts to stay ahead of the competition.
The planned launch of new electric motorcycle models and the affordable Ola S1 models further demonstrates Ola Electric’s commitment to offering a diverse range of products to cater to various market segments. This strategic approach is likely to attract a broader customer base and drive growth in the coming years.
In conclusion, Ola Electric’s IPO is set to play a pivotal role in the company’s expansion and innovation plans. By raising substantial funds through the public issue, the company aims to enhance its manufacturing capacity, invest in research and development, repay debt, and pursue organic growth initiatives. With its ambitious plans and strategic focus, Ola Electric is poised to make a significant impact in the electric vehicle market, both in India and globally.
