Ola Electric to raise $662 million in India’s first EV maker IPO

By VarunVyas Hebbalalu and Rama Venkat

BENGALURU (Reuters) -SoftBank-backed Indian e-scooter maker Ola Electric said on Friday it will raise 55 billion rupees ($662 million) in an initial public offering (IPO) that is tipped to be one of the country’s biggest share sales next year.

The offering, which is the first by an EV-maker in the country, will include an issue of fresh stock, with CEO Bhavish Aggarwal and SoftBank selling up to 47.4 million and 23.9 million shares, respectively, according to a draft prospectus filed with the Indian market regulator.

“This is a much awaited (share) issue, coming from an electric two-wheeler maker … it would set the pace for many more such offerings to follow,” said Arun Kejriwal, founder of Kejriwal Research and Investment Services.

Ola Electric, founded in 2017 in India’s tech hub of Bengaluru, launched its e-scooters two years ago. It plans to use some proceeds from the offering for the expansion of its cell manufacturing facility in the southern state of Tamil Nadu.

Backed by SoftBank and Singapore’s Temasek, the company was valued at $5.4 billion in a recent funding round, Reuters reported in September.

Ola Electric dominates India’s electric two-wheeler segment, with a 32% market share and competes with TVS Motor, Bajaj Auto and Ather Energy.

Ather, backed by Singapore’s GIC, is also planning an India listing and has a market valuation of $739.4 million, according to data from investment tracker Tracxn.

Ola Electric’s IPO comes at a time when India has seen a record number of listings this year, including Tata Technologies and JSW Infrastructure.

“Ola is launching the issue at the right time since there is ample liquidity … the primary market is receiving a humongous response,” said Kranthi Bathini, equity strategist at WealthMills Securities.

Earlier this month, Ola Electric slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, after reduced government incentives pushed up e-scooter prices.

Its consolidated loss widened to 14.72 billion rupees for the year ended March 31, while revenue from operations climbed more than seven times.

India’s government anticipates the share of electric two-wheelers in overall sales to rise to 60%-70% by 2030 from 4.7% in 2023.

($1 = 83.0984 Indian rupees)

(Reporting by Rama Venkat and Varun Vyas in Bengaluru; Editing by Varun H K, Shweta Agarwal and Shounak Dasgupta)