Electric vehicle company Ola Electric is going to create history. In fact, the IPO of an auto company is going to come after 20 years. The last IPO of Maruti Suzuki was in the year 2003. Earlier also it was informed in the media report that the IPO of the company is expected to come at the end of the financial year 2024. The company is looking to raise between $700 million to $800 million i.e. Rs 5,836.3 crore to Rs 6,670.1 crore at a valuation of $7 to $8 billion.
Kotak Mahindra Bank, Bank of America, Citi Bank and Goldman Sachs will work on the IPO. There will be a combination of both fresh equity and OFS in this issue. Ola Electric’s investors include major global investors like Singapore’s Temasek and Japan’s SoftBank. The biggest question is whether Ola will be able to break Maruti’s record. Maruti was listed 20 years ago at a premium of 32 percent. Then the company’s shares were listed at Rs 165, up from its issue price of Rs 125.
3200 crore rupees were raised
In October this year, Ola Electric raised Rs 3,200 crore through equity and debt. Most of this funding is being used to accelerate the setup of an EV manufacturing unit and a battery unit at its Gigafactory in Tamil Nadu. The Gigafactory, scheduled to become operational by early 2024, will play a key role in Ola Electric’s mission to decarbonize the environment. Ola Electric is the leader of the e-two wheeler market in the country. The company’s net loss had doubled to Rs 1,472 crore in financial year 2023. If we talk about consolidated revenue, it will reach Rs 2,782 crore in the financial year 2023.
20 times increase
Ola Electric launched its first electric scooter in 2021. Since then, there was no looking back. Ola claimed in a blog post that from just 4,000 units per month in June 2021, the monthly run rate has reached 80,000 units by the end of 2022. This means that an increase of 20 times has been seen during this period. Last month Ola sold 30,000 EVs. It is now projected to achieve sales of 300,000 e-scooters in the current fiscal year ending in March 2024, despite falling short of an earlier target of 882,000 reported by Reuters in July. Currently, Ola has three scooter models – Ola S1X, S1 Pro, and S1 Air.
Company struggling with safety issues
The EV maker is also struggling with safety issues. The company had announced the recall of 1,441 vehicles in April last year after a fire incident last month. Ola also had to issue a statement regarding several accidents, including incidents of front fork arm breaking. Ola customers are expressing concern on social networks demanding better services.