Ola Electric Converts to Public Company in Preparation for IPO

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In preparation for its impending Initial Public Offering (IPO), Ola Electric has undergone a significant transformation, transitioning from a private limited company to a public company. This crucial step, as revealed in regulatory filings, is imperative for companies aspiring to list on the stock exchange. Notably, the IPO is anticipated to be within the substantial range of $800 million to $1 billion, according to reliable sources.

As part of the corporate restructuring, the firm has officially changed its name from Ola Electric Mobility Private Limited to Ola Electric Mobility Limited, as outlined in regulatory documentation. The next procedural step involves the filing of the Draft Red Herring Prospectus (DRHP), a potent instrument that encapsulates crucial information about the company, aiding potential investors in making well-informed decisions.

Ola Electric, backed by SoftBank, has solidified its position as India’s leading electric vehicle (EV) manufacturer, boasting a potential market share of nearly 35 percent. In a recent funding round, the company successfully raised approximately Rs 3,200 crore through a combination of equity and debt, led by marquee investors such as Temasek and project debt from the State Bank of India. This financial injection elevated the company’s valuation to $5.5 billion, up from its previous valuation of $5 billion, setting the stage for a noteworthy IPO that is poised to be one of the largest in India’s automotive sector.

The freshly acquired funds are earmarked for strategic initiatives, including the expansion of Ola’s electric vehicle business and the establishment of India’s inaugural lithium-ion (Li-ion) cell manufacturing facility in Krishnagiri, Tamil Nadu. These funds will also catalyze the acceleration of Ola Electric’s two-wheeler manufacturing capacity, the introduction of electric motorcycles, the foray into electric cars, and the expeditious construction of the Gigafactory.

In a market where Ola Electric competes with formidable players such as Ather Energy, Okinawa Autotech, Ampere EV by Greaves, Hero Electric, and TVS Motor Company, the company is gearing up to diversify its product portfolio by venturing into electric cars. This move positions Ola Electric in direct competition with established names like Tata Motors and Mahindra & Mahindra, as well as global giants such as Tesla and Hyundai. The company’s commitment to substantial investments in research and development, coupled with its emphasis on cell manufacturing, underscores its strategic approach to future product success.

Noteworthy is Ola Electric’s distinction as the sole Indian EV company chosen by the government under the ambitious Production-Linked Incentive (PLI)-Advanced Chemistry Cell (ACC) Scheme. This designation grants Ola Electric a maximum capacity of 20 gigawatt hours (GWh) and is instrumental in localizing critical aspects of the EV value chain. The establishment of a Li-ion cell manufacturing facility near its Futurefactory in Krishnagiri represents a pioneering effort in India, with an initial capacity of 5 GWh in Phase I, poised for further expansion to 100 GWh at full capacity. This strategic move aligns with the broader industry goals and signals Ola Electric’s commitment to contributing significantly to the burgeoning electric vehicle sector in India.