Ola Electric IPO Overview
Ola Electric, an Electric Vehicle (EV) maker, initiated operations in December 2021 and recently filed its Draft Red Herring Paper (DRHP) with SEBI on December 22, preparing for its upcoming IPO; anticipation is high as Ola Electric is set to be the first pure-play EV maker in the public markets.
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Ola Electric IPO includes a fresh issue worth ₹5,500 crore and an offer for the sale (OFS) of 95.19 million equity shares with a face value of ₹10 per share. The total IPO size is ₹7,250 crore, including the Offer for Sale (OFS). Ola Electric’s founder, Bhavish Aggarwal, plans to sell up to 47.3 million shares in the upcoming IPO.
Initial investors will also sell their shares, including AlphaWave, Alpine, DIG Investment, Matrix, and others. The company is considering a pre-IPO placement of equity shares, amounting to Rs 1,100 crore, which may reduce the Fresh Issue size. Ola Electric aims for a $7-8 billion valuation by early 2024.
Ola Electric IPO Fund Uses
Ola Electric plans to utilize the funds from its IPO for capital expenses, debt repayment, and Research and Development (R&D). Out of the total amount raised, approximately ₹1,226 crore will go towards capital expenses (Capex) and Rs 800 crore for debt repayment.
The majority of the net proceeds, up to ₹1,600 crore, will be invested in R&D, and ₹350 crore will be allocated for inorganic growth initiatives. Ola Electric highlights the R&D, citing expenditures of ₹93.5 crore, ₹5,07.7 crore, ₹1,75.8 crore, and ₹43.6 crore for the three months ended June 30, 2023, and Fiscals 2023, 2022, and 2021.
Akanksha Power and Infrastructure’s IPO is managed by Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets, and BOB Capital Markets. Link Intime India Private Ltd is the appointed registrar for the offer.
The dates for the IPO subscription have yet to be announced, but reports suggest it may commence in early 2024. Neither the offer price nor the IPO price band has been disclosed.
Ola Electric IPO Quota
Ola Electric IPO process follows a book-building approach, allocating 75% for qualified institutional buyers (QIBs), up to 15% for non-institutional investors (NIIs), and a maximum of 10% for retail individual bidders.
| Investor Category | Allocation % |
|---|---|
|
Qualified Institutional Buyers (QIBs) |
75% |
|
Non-Institutional Investors (NIIs) |
Up to 15% |
|
Retails Individual Bidders |
Up to 10% |
Ola Electric IPO Vs. Listed Peers
| Company | Revenue from operations March 31, 2023(in ₹ million) | Face value (₹ per share) | EPS Basics | P/E | Return on Net Worth (%) |
|---|---|---|---|---|---|
|
Ola Electric |
426,309.27 |
10 |
-3.91 |
- |
62.47% |
|
TVS Motors |
319,739.90 |
1 |
27.97 |
69.69 |
22% |
|
Eicher Motors |
144,421.80 |
1 |
106.56 |
36.78 |
19% |
|
Eicher Motors |
144,421.80 |
1 |
106.56 |
36.78 |
19% |
|
Bajaj Auto |
364,553.80 |
10 |
212.5 |
29.95 |
21% |
|
Hero MotoCorp |
341,583.80 |
2 |
140.62 |
27.16 |
21% |
Ola Electric IPO Financial Performance
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2021 |
|---|---|---|---|
|
Total Income |
27,826.97 |
4,562.60 |
1,060.81 |
|
Total Expenses |
38,833.75 |
11,738.12 |
2,849.03 |
|
Loss for the period/year |
-14,270.79 |
-7,841.50 |
-1,992.32 |
|
Total borrowings |
16,457.53 |
7,504.07 |
388.72 |
|
EPS |
-3.91 |
-2.23 |
-0.59 |
