Mumbai: India’s largest electric two-wheeler company Ola Electric plans to raise between USD 800 million and USD 1 billion, or Rs 6,560-8,200 crore, through its initial public offering (IPO), primarily through its capital expenditure Many people are in the know, Vikas told ET.
He said the company is looking at a valuation of $10 billion, or Rs 82,000 crore.
This IPO is going to hit the market in the last quarter of the current financial year. it will make Ola Electric is the first Indian Electric Vehicle (EV) company to be listed.
If Ola Electric is able to secure the sought-after valuation, it will be ranked as the third most valuable two-wheeler maker in the country after Bajaj Auto and Eicher Motors. This could also be the biggest IPO of this financial year so far.
The Bengaluru-headquartered company has appointed Goldman Sachs, ICICI Securities, Axis Capital, Citi and Kotak Securities as lead managers for its IPO. Cyril Amarchand Mangaldas (CAM) and Shardul Amarchand Mangaldas (SAM) are the legal advisors.
The IPO is expected to be a mix of fresh issue of shares, which will form the lion’s share, and offer for sale by existing investors, which will account for around 10% of share sales.
An email sent to the spokesperson of Ola Electric remained unanswered till press time on Thursday. Goldman Sachs, Axis Capital and Kotak Securities also did not respond to ET’s queries, while a spokesperson for ICICI Securities declined to comment.
The IPO move comes close to the USD 300 million fundraising that Ola Electric is finalizing with its existing investors, led by Singapore’s sovereign wealth fund Temasek, at a USD 6 billion valuation.
Officials, on the condition of anonymity, said that a formal announcement of the fundraising is expected in the next 2-3 weeks.
Temasek is a significant investor in Ola cabs operator ANI Technologies and also has a small investment in the company’s EV arm.
A Temasek spokesperson said in an emailed response that as a matter of policy, Temasek does not comment on market speculation and rumours.
In January 2022, Ola Electric raised USD 200 million from investors including Tekne Private Ventures, Alpine Opportunity Funds, and Edelweiss, valuing the electric two-wheeler maker at over USD 5 billion.
If the latest fundraising plan is to be concluded, this will be the tenth round of fundraising undertaken by the company. So far, the company has raised around USD 861 million in nine rounds.
Ola Electric is the market leader in the electric two-wheelers space, with a 28% share in the last three months, when it sold 61,070 e-scooters, according to vehicle data.
TVS Motor has been the most aggressive among the older players Electric two-wheeler market and has captured around 17% share. Presence of other mass-market legacy two-wheeler manufacturers such as Hero MotoCorp and Bajaj Auto is limited in the EV market.
Ola Electric has turned EBITDA positive on monthly sales since the beginning of the current financial year and at its current monthly run-rate could generate revenues of over USD 1 billion annually. In FY23, its revenue was around USD 500 million.
The company plans to invest Rs 2,200 crore for its two-wheeler plant, which will have an installed capacity of 10 million, and another 7,600 crore on cell manufacturing as well as passenger vehicle installed capacity.
Founder and chief executive Bhavish Agarwal told ET in an interview in March 2023 that the company is preparing for a world without incentives and subsidies, as it aggressively pursues its growth plans and ramps up investments.
Ola Electric plans to set up its lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu with an initial capacity of 5 gigawatt hours (GWh). This will later be increased to 20 GWh. So far, it has invested around USD 400 million on cell manufacturing capacity.
The company has been allocated battery cell capacity under the PLI scheme by the government to develop advanced cells in the country. Ola Electric has announced an investment of US$ 500 million in battery innovation and research for the initial ramp-up. The cell manufacturing is primarily targeted to help build a cost-competitive four-wheeler EV that is slated to be launched in 2024.
CLSA forecasts two-wheeler retail sales to grow at 9% CAGR between FY22 and FY31 and at 8% CAGR during FY22 to FY36.
It expects EV penetration levels to increase from 11.9% in FY22 to 14.8% in FY31 and 21.0% in FY36. The penetration rate is based on the assumption that at an all-India level, vehicle ownership in FY31 will reach high-income state ownership levels in FY23, as average per capita income in FY31 reaches high-income state FY22 levels expected to arrive. states.
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