In draft documents submitted to the nation’s market regulator on Friday, Bengaluru-based Ola Electric, a six-year-old company, stated that it plans to raise $661.8 million by offering additional shares in an IPO.
The IPO filing comes after Ola Electric raised $384 million in a debt-heavy investment round in late October from Temasek and the State Bank of India, an Indian government-backed lender. As TechCrunch previously reported, the October investment valued the business, which has raised about $1 billion over the years, at $5.4 billion. In the IPO, the business hopes to raise between $6.5 billion and $8 billion in value, a source close to the situation told TechCrunch.
According to the draft prospectus, the business intends to sell some 95.2 million shares to current investors and owners, including some from founder Bhavish Aggarwal (seen above), Alpha Wave Ventures, Tiger Global, Matrix Partners, and SoftBank. The prospectus states that Kotak, Citi, Bank of America, Goldman Sachs, Axis, ICICI, SBI, and BOB Capital handle the IPO book.
According to the prospectus, Ola Electric intends to utilize around $150 million of the total proceeds to increase the manufacturing capacity of its facility that produces electric car cells from 5-gigawatt hours to 6.4 gigawatt hours. With a sizable manufacturing center in India, it intends to expand its EV business into automobiles, batteries, and cells. Aggarwal wants to manufacture his automobiles, motorcycles, and lithium-ion batteries.
2019 saw Ola Electric, led by Aggarwal1, break out of the massive ride-hailing company Ola. Nevertheless, the two companies pooled a lot of resources, and some Ola investors asked Aggarwal to set up a holding company for the two companies and give them shares in the leading company.
The paper states that it lost $176 million in the fiscal year 2023. The company included several risk concerns in its research, such as the prospect of several significant management changes and the government ceasing to provide incentives to regional producers of electric vehicles. Ola Electric stated, “In the seven months ending October 31, 2023 (on an annualized basis) and Fiscal 2023, our staff attrition rate was 42.06% and 47.48%.
All things considered, though, it’s impressive that Ola Electric, which this year introduced several new, more affordable versions of its flagship S1 electric scooter model in addition to an improved model, is already leading the Indian EV scooter industry with over 35% of the market share. It is the nation’s first two-wheeler manufacturer to go public in over 15 years.
1. According to Ola Electric in the DRHP:
As our founder, chairman, and managing director, Bhavish Aggarwal’s services and reputation are essential to us and significantly impact our business plan. In addition, he launched Krutrim SI Designs Private Limited, a new business, and serves as Chairman and Managing Director of ANI Technologies Private Limited. His engagement with Krutrim SI Designs Private Limited and ANI Technologies Private Limited may limit the time he can devote to our company.
2. Ola Electric states:
With ANI Technologies Private Limited (“ANI”) and its subsidiaries, we have entered into several transactions, including (i) our sublease of the Corporate Office and Registered Office from ANI; (ii) our agreement with ANI for the sale and promotion of our electric vehicles on their website and app; (iii) our agreement with Ola Financial Services Private Limited, a subsidiary of ANI, for the distribution of insurance policies for our electric vehicles; (iv) services rendered by Geospoc Geospatial Services Private Limited, ANI-affiliated company that powers the Ola Maps navigation system on our MoveOS version 4 platform; and (v) our arrangement with Ola Fleet Technologies Private Limited, LLC Our company operations would suffer if we were unable to go on with these transactions with ANI and its subsidiaries in the future.
Even though we think every transaction has been carried out at arm’s length, we can’t guarantee that we wouldn’t have gotten better terms if these transactions hadn’t been made with connected parties.
We could probably do related-party transactions in the future. Even though any related party transactions we may enter into after listing would require approval from the Audit Committee, Board, or Sharehol, we cannot guarantee that they will be in the best interests of our company and minority shareholders, that they will comply with the SEBI Listing Regulations, and that they won’t negatively impact our financial condition and operational results either individually or collectively.
Moreover, there is a chance that any future business dealings with our connected partners could contain conflicts of interest, which might be bad for our company. We cannot guarantee that we will be able to resolve conflicts of interest of this nature in the future.
