Ola Electric Mobility Sets IPO Price Band, Targets Massive Growth in EV Sector

Ola Electric Mobility has set a price band of Rs 72-76 per equity share for its Rs 6,100-crore IPO, launching on August 2. The funds raised will enhance cell manufacturing capacity, R&D, and debt repayment. The trial production of its gigafactory is underway, with operations to start early next year.

Ola Electric Mobility, backed by Softbank, announced Monday it has set a price band of Rs 72-76 per equity share for its much-anticipated Rs 6,100-crore initial public offering (IPO). The IPO will open for subscription on August 2 and close on August 6.

The fundraising effort, comprising a fresh issue of equity shares worth up to Rs 5,500 crore and an offer for sale of 8.49 crore shares by promoters and investors, aims to boost cell manufacturing capacity and research and development. Ola's founder Bhavish Aggarwal will offload approximately 3.8 crore shares as part of the offer for sale.

Proceeds of Rs 1,227.6 crore will increase the cell manufacturing plant's capacity from 5 GWh to 6.4 GWh, while Rs 1,600 crore will be invested in research and product development. Additional funds will also be allocated for debt repayment and organic growth initiatives.

Trial production at Ola's gigafactory is currently ongoing, with full operations expected to commence early next year. Phase 1(a) and Phase 1(b) of the factory setup and expansion, partially funded by internal accruals and long-term borrowings, aim to bring the gigafactory's capacity to 5 GWh by October 2024.

Aggarwal emphasized that Ola Electric's profitability is improving, with gross margins increasing to 16 percent and EBITDA margins improving from negative 43 to negative 19. The company's revenue surged by 90 percent over FY23, underscoring its growing market presence.

With an estimated 40 percent EV market penetration in India by 2030, Ola Electric is bullish on its future prospects, aiming to lead the electric vehicle space through vertical integration and comprehensive R&D efforts.