The Issue is a fresh issue of equity shares up to ? 5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares at a face value of ? 10
FinTech BizNews Service
Mumbai, December 22, 2023: Bengaluru-based Ola Electric, a pure EV player, has
filed its Draft Red Herring Prospectus (DRHP) with capital market regulator SEBI to
raise funds for its initial public offering (IPO). The Issue is a fresh issue of equity
shares up to ? 5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares at
a face value of ? 10.
The issue is being made through the book-building process, wherein not less than
75% of the issue shall be available for allocation on a proportionate basis to qualified
institutional buyers, not more than 15% of the issue shall be available for allocation
to non-institutional bidders, and not more than 10% of the issue shall be available for
allocation to retail individual bidders.
As per the DRHP, the proceeds from the fresh issue will be used for capital
expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project,
repayment or pre-payment, in full or part, of the indebtedness incurred by subsidiary,
OET, investment into research and product development, expenditure to be incurred
for organic growth initiatives and general corporate purposes.
The leading EV player is building vertically integrated technology and manufacturing
capabilities for EVs and core EV components, including cells. It manufactures EVs
and core EV components such as battery packs and motors at Ola Futurefactory, its
manufacturing facility in Krishnagiri. The Ola Futurefactory is the largest integrated
and automated E2W manufacturing plant in India based on production capacity, as
of September 30, 2023, according to the Redseer Report. The company is in the
process of building a EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu,
India, which includes the Ola Futurefactory, the upcoming Ola Gigafactory and co-
located suppliers in Krishnagiri district.
It introduced its first EV model – S1 Pro in August 2021 and currently has a portfolio
of 5 scooter models. Within nine months of Ola Electric delivering its first EV scooter,
it surged to become the best-selling E2W player in India based on E2W registrations
listed on the VAHAN Portal of the Ministry of Road Transport and Highways. As of
three-months period ended June 30, 2023, it has an E2W market share of 31% and
aims to explore exporting EVs to specific international markets in the future.
Its business model is founded on three key scalable platforms (1) R&D and
technology platform with in-house design and development across EV technologies
and components, (2) Adaptable manufacturing and supply chain platform, and (3)
D2C omnichannel distribution platform
Research and development and technology is at the core of its business model with
a focus on in-house product innovation. It undertakes R&D activities focused on
designing and developing new EV products and core EV components in India, the
United Kingdom and the United States. It also operates a battery innovation centre
(“BIC”) in Bengaluru, India that is focused on developing cell and battery technology
and manufacturing processes for the forthcoming cell manufacturing at the Ola
Gigafactory.
It Also has a vertically integrated manufacturing and supply chain ecosystem across
its core EV components and a resilient supply chain focussing on localisation and
co-location of suppliers.
As per the DRHP, it operates its direct-to-customer (“D2C”) omnichannel distribution
network, comprising of 935 experience centres situated across India which includes
414 service centres, as of October 31, 2023. Its D2C omnichannel distribution
network comprises of an integrated company-owned sales and service network, a
charging network, and an online retail platform
The company recently announced new EV scooter models, the Ola S1 X (2 kWh)
and Ola S1 X (3 kWh) and Ola S1 X+. It started delivering Ola S1 X+ in December
2023. It plans to commence delivery of the Ola S1 X (2 kWh) and the Ola S1 X (3
kWh) by the first half of the Fiscal 2025. It is also working towards delivering the
recently announced line-up of four motorcycle models: Diamondhead, Adventure,
Roadster, and Cruiser in the first half of Fiscal 26.
In September 2023, the company launched MoveOS version 4, as a beta roll-out,
which included new features such as navigation powered by Ola Maps, call filter,
‘find my scooter’, geofencing, time fencing, anti-theft alert, fall detection, hill hold,
auto turn-off indicators, ride journal and energy insights. Its EV scooters are
connected to a network and designed to transmit data through the vehicle telematics
systems, this enables them to continually enhance its product features and
performance.
According to the Redseer Report quoted in the DRHP, in fiscal 2023, the company
topped the charts among Indian incorporated electric 2-wheelers (E2Ws) and original
equipment manufacturers (OEMs) in terms of revenue from E2W sales.
For the fiscal year 2023, revenue from operations increased more than seven times
to ? 2,630.93 crore against ? 373.42 crore a year ago. For the three months ended
June 30, 2023, revenue from operations stood at ? 1,242.75 crore. The company
has also been approved for India’s PLI schemes – one relating to the manufacturing
of advanced automotive technology products (the “Automobile PLI Scheme”), and
another relating to advanced cell chemistry batteries (the “Cell PLI Scheme”).
India is at the forefront of electrification of mobility due to the favourable total cost of
ownership as compared to Internal Combustion Engine Vehicles. India is the
2 nd largest 2W market globally (by domestic sales volume) and E2Ws are projected
to account for 41-56% of the domestic 2W sales volumes by Fiscal 2028, according
to the Reseer Report.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private
Limited, BofA Securities India Limited, Goldman Sachs (India) Securities Private
Limited, Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited
and BOB Capital Markets Limited are the book-running lead managers, and Link
Intime India Private Limited is the registrar of the offer. The equity shares are
proposed to be listed on the BSE and NSE.
