India’s largest electric two-wheeler Ola Electric is set to ride to the bourses with its initial public offering (IPO) opening for subscription on Friday, August 2. The proposed IPO is a combination of a fresh issue of equity shares up to Rs 5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares by promoters and investors, the prospectus showed.
Here’s what you should know before subscribing to Ola Electric IPO:
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Price band and other details
The SoftBank-backed escooter maker will float its IPO in the price band of Rs 72-76 rupees, in what will be one of the country’s biggest IPOs this year.
The firm will offer a discount of Rs 7 per share for certain eligible employees bidding in the IPO.
The initial share sale will conclude on August 6, and the bidding for anchor investors will open for a day on August 1.
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The company will reserve 10% of the IPO for retail investors.
Under the OFS, Ola Electric founder Bhavish Aggarwal will offload almost 3.8 crore shares.
Valuation discount
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Investor bids
The IPO is set to draw investor bids bids from Fidelity, Nomura, as well as multiple Indian mutual funds.
Domestic investors like SBI AMC, HDFC AMC, Nippon Life India AMC and UTI AMC bidding about $200 million each.
Fidelity, Nomura and Norway’s Norges Bank will bid in the range of $75-100 million each in IPO anchor book.
What the funds will be used for
Ola Electric said that a significant part of the proceeds will be used for capacity expansion of its cell manufacturing plant and revving up R&D.
According to its prospectus, the firm plans to utilise Rs 1,227.6 crore on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh.
Besides, Rs 1,600 crore will be used for research and product development, another Rs 800 crore will be deployed to repay debts and Rs 350 crore for organic growth initiatives.
Ola Electric financials
Ola Electric reported revenue from operations of Rs 5,009.8 crore in the previous financial year, compared with Rs 2,630.9 crore in FY23, according to its RHP.
Loss for the fiscal year stood at Rs 1,584.4 crore, against Rs 1,472.1 crore in FY23.
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