After many delays and near misses, Ola Electric is finally set to go public.
Ola Electric’s IPO will open on to the public on Friday, 2nd August 2024. The IPO will offer Ola Electric’s shares in the Rs. 72-76 band, and value the company at $4 billion. With a book built issue of Rs. 6145 crore, it is one of the largest IPOs in India this year.
The IPO is a combination of fresh issue of shares worth Rs. 5,500 crore, and an Offer For Sale (OFS) for shares worth Rs. 645 crore. As a part of the OFS, CEO Bhavish Aggarwal and other investors will offload a part of their stakes in the company. Ola Electric will tentatively list on the exchanges on 9th August 2024.
This is rapid progress for Ola Electric, which was founded only in 2017. The company had acquired European EV maker Ertego in 2020, following which it quickly began manufacturing its own EV scooters after setting up the world’s largest 2W EV manufacturing facility in Tamil Nadu. In 2021, Ola had embarked on a extensive marketing campaign for its electric scooters, and had finally unveiled its first scooter in August in a glitzy event. Deliveries for the scooter had initially been delayed, but had later caught pace. There had been no shortage of demand for Ola’s scooters, and Ola had quickly become India’s largest 2W EV seller, leaving behind companies like Bajaj and TVS. There had been some controversies for the company to contend with as well — there had been bad press about Ola’s scooters catching fire in a few instances, but that didn’t seem to dampen user enthusiasm, and Ola continues to be India’s largest Indian 2W EV seller to this day. Ola’s dominance has been such that it currently has a greater than 50 percent market-share in electric 2 wheelers in India.
But even as Ola is selling lots of scooters, it isn’t making money. Ola Electric’s revenue surged 90 percent in FY24, but its losses too rose 8 percent, rising from Rs. 1,472 crore in FY23 to Rs. 1,584 crore in FY24. In spite of subsidies being offered the government, Ola Electric is yet to report a profit since it was founded.
But there’s precedent that startups can turn this situation around. Zomato too hadn’t made a profit when it was listed, but now is consistently in the black, and has seen its share price zoom as a result. Ola Electric would hope that it can achieve a similar outcome. But the very fact that the company has become India’s largest 2-wheeler EV maker, staved off the challenge from incumbents like Bajaj and TVS, and is now set to go public, would be enough reason for cheer for Bhavish Aggarwal and his early backers.