SEBI has approved Ola Electric to launch an IPO worth ₹5,500 crore, according to reports

Ola Electric, a company that manufactures electric vehicles, has obtained approval from the Securities and Exchange Board of India (SEBI) for its upcoming initial public offering (IPO) with the goal of raising Rs 7,250 crore, as reported by sources to Moneycontrol.

Ola Electric was the very first Indian electric two-wheeler manufacturer to submit paperwork for an Initial Public Offering. The company submitted its draft red herring prospectus (DRHP) to the regulatory authorities on December 22, 2023.

Ola Electric's IPO includes a new issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore making a total of Rs 7,250 crore. According to the company's DRHP, current shareholders are reported to be selling 95.19 million shares in the OFS.

Bhavish Aggarwal, who established Ola Electric, plans to sell 47.3 million shares. AlphaWave, Alpine, DIG Investment, Matrix, and additional initial investors will also be offloading 47.89 million shares via the OFS.



The company is also considering a re-IPO offering of shares valued at Rs 1,100 crore. If this occurs, the fresh issue will be decreased by the same amount.

As per the DRHP, Ola Electric intends to utilize the funds for capital expenses, repayment of debt, and research and development (R&D). The company intends to dedicate around Rs 1,226 crore for capital expenditures, and Rs 800 crore for repaying debts. The company intends to dedicate around Rs 1,600 crore for research and development, and Rs 350 crore for inorganic growth.

Sebi has given approval while Ola Cabs has started talks with investment banks for a possible IPO launch.

Ola Electric currently holds the majority of the market for electric two-wheelers, with approximately 52% market share. Data from the Government's VAHAN website shows that the company saw a 54% year-on-year growth with the registration of 34,000 units during the month.

Ola Electric's total revenues surged by nearly 510 percent to reach Rs 2,782 crore in the fiscal year ending in March 2023, resulting in a net loss of Rs 1,472 crore due to escalating costs.

Ola Electric reported earnings of Rs 1,272 crore and losses of Rs 267 crore for Q1 2023-24. As of June 30, 2023, the company's net value stood at Rs 2,111 crore.

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