The new Ola electric scooter is showcased during its launch at Ola headquarters in Bengaluru on August 15, 2021.
Manjunath Kiran | AFP | Getty Images
Indian electric scooter maker Ola Electric said on Monday it plans to raise $734 million in the year’s largest domestic IPO, with foreign investors eyeing the offering after the SoftBank-backed company’s valuation plunged $4 billion.
The IPO comes amid a boom in India’s stock market, with more than 150 companies raising nearly $5 billion through public listings between January and July, nearly double the same period last year, according to data from the London Stock Exchange.
Indian electric car maker’s initial public offering will put investors bet on clean energy push by Prime Minister Narendra Modi’s government and Indian companies Tata Motors and TVS arrive Hyundai Motor.
“Tesla is for the West, Ola is for the rest,” is a slogan that has become most associated with the company’s chairman, Bhavish Aggarwal. Big bets are being placed on clean cars.
Subscribe now
Electric scooters start at around $900, and Ola Electric has become the largest player in a country where scooter adoption remains low but is growing rapidly. Although it holds 46% of the electric scooter market slash sales targets last year.
The term sheet shows the IPO, which sold its first scooter in 2021, will take place between August 1 and 6, valuing the company at $4 billion.
The valuation is about 25% lower than Ola’s last funding round in September, which was led by Singaporean investment firm Temasek, which valued the electric vehicle maker at $5.4 billion.
The sources, who did not want to be named, said the lower figure stems from a revaluation of global technology companies and Ola is also looking to attract players for the share issue.
The initial public offering (IPO) is expected to be investor bid Sources on condition of anonymity told Reuters the valuation was at $4 billion from Fidelity, Nomura and Norges Bank, as well as several Indian mutual funds.
In the IPO, Ola will issue new shares to raise $657 million, while existing investors will sell their shares of about $77 million to IPO investors, the term sheet shows.
The company announced a price range of 72 rupees to 76 rupees ($0.86 to $0.91) in an ad in the Financial Express, offering a discount of 7 rupees per share to some eligible employees.
Aggarwal, along with investors including SoftBank and Matrix Partners, will sell some of their stakes in the IPO.
Newspaper ads on Monday showed that 10% of the IPO will be reserved for retail investors and the proceeds will be used for capital expenditure and research and development work.
Aggarwal also plans to start selling electric cars in 2024, but Reuters reports They have been suspended so that the company can focus on electric scooters. It also plans to enter the electric motorcycle segment.
The company disrupted the two-wheeler market, forcing existing players like TVS to pivot, hero motorcycle co., ltd. and Bajaj Autoreported a pre-tax loss of 1,584 billion rupees ($189 million) for the 2023-24 financial year.
About The Author
