Ola Electric Sets Sights on 2024 IPO as Bhavish Aggarwal Explores Stock Market Journey
- ByStartupStory | May 26, 2023
According to market rumors, Ola Electric, a leading electric two-wheeler company, is reportedly considering a stock market listing in early 2024. This decision coincides with the challenging economic conditions and the decline in the equity market, which has led several Indian tech startups to postpone their IPO plans since 2022. However, it is worth noting that Ola Electric has been facing criticism from customers regarding the quality of its after-sales service, adding to the company’s challenges.
According to sources, multiple publications have reported that Ola Electric is preparing for an initial public offering (IPO) in 2024. The company is allegedly in discussions with banking partners such as Kotak, Citibank, and Goldman Sachs for the IPO. It has also enlisted Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas as legal advisors for the process.
According to reports, a source has revealed that Ola Electric has not yet determined a specific timeline for its IPO; however, the goal is to launch it before the upcoming general elections. The IPO is expected to consist of both primary and secondary share offerings, as indicated by sources familiar with the matter. Ola Electric has also not finalized the valuation, considering the emerging nature of the electric vehicle (EV) market in India. Nevertheless, the founder and CEO, Bhavish Aggarwal, has set a target market capitalization of $10 billion.
According to the report, key events to monitor leading up to Ola Electric’s IPO include the company’s motorcycle launch and the development of its battery innovation center in Bengaluru. These milestones are expected to hold significance and garner attention in the context of the impending IPO.
Over the past year, Ola Electric has faced numerous controversies, encompassing concerns related to product quality, incidents of escooter fires, service-related issues, and allegations of misusing FAME-II subsidies.
Despite these challenges, the company has remained steadfast in pursuing its ambitious objectives, consistently introducing new stores, expanding its product lineup, and unveiling fresh offerings. As part of its endeavors, Ola Electric recently launched more cost-effective versions of its Ola S1 and Ola S1 Air scooters.
In December 2022, Ola Electric unveiled its plans to introduce additional electric two-wheeler models in the years 2023 and 2024. These models encompass a mass-market scooter, a mass-market motorcycle, and multiple premium motorcycles. Recently, the startup achieved a significant milestone by inaugurating its 500th experience center in India.
Looking ahead, the year 2024 holds substantial importance as Ola Electric aims to launch its first electric car during that period, as previously announced by founder Bhavish Aggarwal. The company is also making substantial investments, exceeding INR 7,600 crore, to establish manufacturing facilities in Tamil Nadu over the next five years. These facilities will cater to the production of three-wheelers, EV components, and batteries, effectively transforming the region into an electric vehicle hub.
According to recent media reports, Ola Electric has allegedly secured $300 million in its most recent funding round, valuing the company at $6 billion. However, it is worth noting that the company’s official last funding round took place in January 2022, where it raised $200 million at a valuation of $5 billion, with participation from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss, and other investors.
Ola Electric maintains its position as a frontrunner in the electric two-wheeler market, as evidenced by vehicle registration data from Vahan. In April, the company recorded 21,957 unit registrations, which increased from 21,404 units in March. As of May, the company has registered 17,647 units so far this month.
Founder Bhavish Aggarwal had previously stated that Ola Electric expects its two-wheeler EV business to become profitable in 2023. However, considering that Aggarwal’s ride-hailing venture, Ola, has been postponing its IPO since 2022, it remains uncertain whether Ola Electric will be able to adhere to its IPO plans for 2024.
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