Ola Electric Mobility Ltd., a leading player in India’s electric vehicle (EV) sector, has announced its IPO price band, ranging from ₹72 to ₹76 per share. The initial public offering (IPO) is set to raise ₹5,500 crore and will be open for subscription from August 2 to August 6.
IPO Details and Structure
The IPO comprises a fresh issue of equity shares and an offer for sale (OFS) of up to 8.4 crore shares with a face value of ₹10 each. Key shareholders participating in the OFS include Ola’s promoter Bhavish Aggarwal and investors such as SoftBank, Temasek, and Matrix Partners India. The allocation of the IPO is structured to reserve 75% for institutional investors, 15% for non-institutional investors, and 10% for retail investors.
Subscription Guidelines
Investors can bid for a minimum of 195 equity shares, and additional bids must be made in multiples of 195 shares. An attractive feature for eligible employees is a ₹7 discount per share on the offer price, providing an incentive for internal stakeholders to participate in the IPO.
Ola Electric’s Market Presence
Ola Electric is a prominent player in India’s EV market, known for its integrated technology and manufacturing capabilities. The company has successfully delivered seven EV products and has announced four new ones. As of March 31, 2024, Ola Electric’s omnichannel distribution network includes 870 experience centers and 431 service centers, in addition to its online presence.
Financial Performance and Future Investments
Despite its market presence, Ola Electric has been loss-making. The company reported a loss of ₹1,584 crore in the financial year 2024, an increase from the ₹1,472 crore loss in the financial year 2023.
A significant portion of the IPO proceeds, ₹1,600 crore, is earmarked for investment in research and development (R&D). This investment aims to advance Ola Electric’s technological capabilities and product offerings. However, the company has cautioned that the outcomes of these investments are uncertain and may not lead to tangible assets or anticipated results.
Risk Factors and Investor Considerations
Ola Electric’s prospectus outlines potential risks, including the uncertainty of R&D investments yielding expected results. Investors are advised to consider these risks alongside the company’s growth potential and market position.
Conclusion
The upcoming IPO of Ola Electric presents a significant opportunity for investors to participate in India’s burgeoning EV sector. With a well-established market presence and ambitious plans for future growth, Ola Electric aims to leverage the IPO proceeds to enhance its technological capabilities and product portfolio. However, potential investors should carefully evaluate the associated risks and financial performance before making investment decisions.
