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Ola Electric IPO: All you need to know before subscribing
By
Megha Mishra
, ETtech
Synopsis
Ola Electric will float its IPO on August 2, offering equity shares worth Rs 5,500 crore and an additional 8.49 crore shares from promoters. The IPO aims to raise funds for manufacturing capacity expansion, research, and debt repayment. Key anchor investors in the issue include Fidelity, Nomura, and several Indian mutual funds.
ETtechOla Electric, India’s largest electric two-wheeler maker, is set to ride to the bourses with its initial public offering (IPO) opening for subscription on Friday, August 2. The proposed IPO is a combination of a fresh issue of equity shares up to Rs 5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares by promoters and investors, the prospectus showed.
Here’s what you should know before subscribing to Ola Electric IPO:
Price band and other details
- The SoftBank-backed escooter maker has set a price band of Rs 72-76 for what will be one of the country’s biggest IPOs this year.
- The firm will offer a discount of Rs 7 per share for certain eligible employees.
ETtech- The initial share sale will conclude on August 6, and the bidding for anchor investors will open for a day on August 1.
- The company will reserve 10% of the IPO for retail investors.
- Under the OFS, Ola Electric founder Bhavish Aggarwal will offload almost 3.8 crore shares.
Valuation discount
- Ola Electric is expecting a lower valuation of about $4 billion, down about 25% from its last private funding round. ET first reported on July 16 that the company would float its IPO at a discounted valuation.
- In September last year, the startup had commanded a valuation of $5.4 billion in a $140-million funding round led by Singapore’s Temasek.
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Investor bids
- The IPO is set to draw investor bids from Fidelity, Nomura, as well as multiple Indian mutual funds.
- Domestic investors like SBI AMC, HDFC AMC, Nippon Life India AMC and UTI AMC will bid for about $200 million each.
- Fidelity, Nomura and Norway's Norges Bank will bid in the range of $75-100 million each in the IPO anchor book.
What the funds will be used for
- Ola Electric said a significant part of the proceeds - Rs 1,227.6 crore -- will be used to expand capacity of its cell manufacturing plant to 6.4 GWh from 5 GWh.
- While Rs 1,600 crore will be used for research and product development, another Rs 800 crore will be deployed to repay debts, and Rs 350 crore for organic growth initiatives.
Ola Electric financials
- Ola Electric reported revenue from operations of Rs 5,009.8 crore in the previous financial year, compared with Rs 2,630.9 crore in FY23, according to its prospectus.
- Loss for the fiscal year stood at Rs 1,584.4 crore, against Rs 1,472.1 crore in FY23
( Originally published on Jul 29, 2024 )
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