As Ola Electric announces its IPO price band of Rs 72-76 apiece, Bhavish Aggarwal would be seeking about Rs 10,000 crore valuation for 1,36,18,75,240 shares, or 36.94 per cent stake, that he held in the pure EV player by his name, as on the date of Red Herring prospectus (RHP). Based on the upper and lower limit of the price band, he would enjoy a fortune of Rs 9,800 crore and Rs 10,350 crore, respectively, at the Ola Electric listing — an average of Rs 10,075 crore.
The IPO would include a fresh share sale of up to Rs 5,500 crore and offer for sale (OFS) of up to 8,49,41,997 equity shares by its promoters and existing shareholders amounting to Rs 645.56 crore at the upper end of the price.
Out of the total shares he held, Aggarwal would be offloading 37,915,211 in the OFS while keeping the rest. A promoter entity Indus Trust would also be selling up to 4,178,996 shares in the issue. The weighted average cost of acquisition for the two promoter and promoter entities was negligible to nil.
Other shareholders such as Internet Fund III Pte Ltd, SVF II Ostrich (DE) LLC and Tekne Private Ventures XV have average acquisition cost ranging from Rs 11.70 to Rs 113.12 per share. Among them, Ab Initio Capital, L.P and and Alpine Opportunity Fund VI, LP ( acquisition cost: Rs 111.51 per share each) would be two shareholders, which would be selling shares in the OFS at losses.
Aggarwal & Ola Electric
Aggarwal, who holds a bachelor’s degree of technology in computer science and engineering from the Indian Institute of Technology, Bombay, founded Ola Cabs, a ride hailing platform operated by ANI Technologies in 2010. He is currently the Chairman and Managing Director of ANI Technologies. ANI Technologies owns 4.35 per cent stake in Ola Electric. It is not among selling shareholders.
Aggarwal’s Ola Electric manufactures EVs and certain core EV components such as motors, battery packs and vehicle frames at the Ola Futurefactory. His company seeks opportunities to export EVs in select international markets in the future. It has launched seven products so far and announced four others since its first product in August 2021.
“With a 35 per cent market share in India’s electric two-wheeler market in FY24, up from 21 per cent in FY23, Ola Electric sold 3.29 lakh units in FY24, more than doubling its sales from the previous year. IPO not only showcases Ola Electric’s growth and market leadership but also highlights the potential of the EV sector,” said Master Capital Services.
Ola Electric’s financial performance
Ola Electric’s revenue for FY24 almost doubled to Rs 5,243.27 crore from 2,782.69 crore in FY23, primarily due to increased sales of the Ola S1 and Ola S1 Pro scooters and the commencement of deliveries of the Ola S1 Air and Ola S1 X+. But it losses widened to Rs 1,584 crore from Rs 1,472 crore. In fact, Ola Electric has been incurring losses and negative cash flows from operations since inception.
Ola Electric’s near-term losses
In its RHP, Ola Electric said it may continue to incur operating losses in the near term as it invests in business and expands product portfolio, build capacity and scale operations.
The expansion of product portfolio, including the introduction of Ola S1 Pro, Ola S1 Air, the Ola S1 X+, Ola S1 X (2 kWh), Ola S1 X (3 kWh) and Ola S1 X (4 kWh) and Ola’s strategy of expanding sales footprint across international automotive markets, could result in an increase in operating costs, it said.
Ola Electric R&D spend
Ola Electric intends to utilise Rs 1,600 crore out of the net proceeds for investment into research and development purposes, although there is no assurance that such investment will proceed as planned and result in creation of tangible assets, Ola said in its RHP.
Ola Electric said if its vehicles become ineligible for the EMPS 2024 subsidy, it may become less competitive due to higher product pricing (without the subsidies), potentially impacting its business and financial performance.
Ola Electric vs listed two-wheeler players:
Here is Ola Electric’s comparison with listed two-wheeler makers.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Ananya Das is your guide to the latest trends, viral sensations, and internet phenomena. Based on a keen understanding of digital culture, Sophie navigates the ever-evolving landscape of trending topics. With an insightful and engaging approach, she explores what’s buzzing across social media platforms, ensuring readers stay in the loop with the most talked-about and shareable content online.
