"Ola Electric's IPO: What to Expect from India’s Electric Scooter Giant"
Image: Ola Electric
Image Courtesy: 91mobiles.com
Ola Electric is gearing up for a major moment in its journey with an Initial Public Offering (IPO) set to launch on August 2.
This anticipated move marks a significant milestone for the Bengaluru-based electric scooter manufacturer, poised to raise approximately Rs 5,500 crore ($657 million). This IPO could signal a new wave of high-profile public offerings by new-economy companies in India.
Dive into the details of Ola Electric's IPO, understand its market positioning, and learn what this means for the future of electric mobility and tech IPOs in India.
1. IPO Details: A Closer Look
Ola Electric has officially announced that its IPO will open for retail investors on August 2, with institutional investors getting a head start on August 1.
The company plans to raise a substantial Rs 5,500 crore, aiming to solidify its financial position and expand its operations.
This offering is expected to influence the trajectory of new-economy IPOs this year, setting a precedent for similar tech-driven public listings.
2. Reduction in Offer for Sale (OFS)
Image: Ola Electric IPO
Image Courtesy: Entrackr
In a recent regulatory filing, Ola Electric revealed a reduction in the Offer for Sale (OFS) shares.
Founder Bhavish Aggarwal will now sell 37.9 million shares, which is a decrease from the initially planned 47.4 million shares.
The overall OFS has been trimmed to 84.9 million shares from the earlier 95.2 million shares listed in the draft prospectus.
3. Fresh Issue of Shares
Despite the reduction in OFS, the fresh issue of shares remains unchanged, aiming to raise Rs 5,500 crore.
This move is pivotal for the company's growth plans and operational expansions. The IPO will conclude with the retail subscription closing on August 6.
4. Valuation Adjustments and Market Impact
Ola Electric's valuation has seen adjustments from its initial expectations. The company was previously targeting a valuation of $6-7 billion but has revised this to around $4 billion based on feedback from bankers and market conditions.
The company's valuation had peaked at $5.4 billion following a $140 million investment from Singapore's Temasek in September 2023.
5. Competitive Landscape
Ola Electric continues to dominate the Indian electric scooter market, holding a significant 39% market share as of July 27.
The company's primary competitors include Hero MotoCorp-backed Ather Energy, Bajaj Auto, and TVS Motors. Despite the rise of these competitors, Ola Electric maintains a strong foothold in the market, reflecting its robust growth and market influence.
6. Broader Market Context
Ola Electric’s IPO comes at a time when technology and new-economy companies are making a comeback in the public markets after a brief hiatus.
Notable upcoming IPOs, including ecommerce firm FirstCry, highlight the resurgence of interest in tech-driven public offerings.
Ola Electric's upcoming IPO is not just a significant event for the company but also a pivotal moment for the Indian tech and electric vehicle sector.
With substantial funds being raised and adjustments in valuation, this IPO could set new benchmarks for future tech IPOs.
For investors, the offering presents an opportunity to be part of a leading player in the electric mobility space. Keep an eye on how Ola Electric's public debut unfolds and its impact on the broader market.