Ola Electric, the pioneering electric vehicle (EV) manufacturer, has recently secured a significant boost in its funding endeavors. Reports confirm that the company has successfully raised $50 million in debt funding from EvolutionX Debt Capital, a renowned debt financing platform. This strategic move comes just ahead of Ola Electric’s highly anticipated Initial Public Offering (IPO), marking a pivotal moment in its growth trajectory.
The funding was facilitated through the issuance of 41,000 non-convertible debentures (NCDs) at an issue price of Rs 1 lakh each, according to the company’s Registrar of Companies (RoC) filings. This injection of capital adds to Ola Electric’s robust financial arsenal, following its previous successful round of equity and debt funding in October last year. During that round, the company secured a staggering Rs 3,200 crore from prominent investors such as Temasek and SBI, earmarked for expansion initiatives and the establishment of its EV business infrastructure.
One of the primary objectives outlined for the utilization of the funds is the establishment of a state-of-the-art lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu. This ambitious project underscores Ola Electric’s commitment to bolstering domestic manufacturing capabilities and fostering sustainable mobility solutions.
Ola Electric’s forthcoming IPO, as outlined in its draft red herring prospectus (DRHP), aims to raise $660 million. Additionally, there is a proposed offer for the sale of 95.2 million equity shares at a face value of Rs 10. The company’s ambitious investment plans include allocating Rs 1,600 crore towards research and development endeavors, further enhancing its technological prowess and product innovation capabilities.
Furthermore, Ola Electric’s subsidiary, Ola Cell Technologies, is set to utilize Rs 1,226.4 crore for the construction of the Ola Gigafactory project, a crucial component in the company’s pursuit of scaling up production capacities and meeting burgeoning market demand.
Despite Ola Electric’s successful fundraising efforts, the broader startup ecosystem in India has encountered challenges, with venture capital funding witnessing a 22% decline at the close of the first quarter of 2024 compared to the previous year.According to YourStory Research, Indian startups collectively raised $2.5 billion in VC funding during Q1 2024, down from $3.2 billion in Q1 2023, signaling a need for sustained support and investment in the startup landscape.
