Ola Electric Sets $10B Valuation Target for IPO, Plans to File DRHP Next Quarter
- ByStartupStory | May 27, 2023
According to sources familiar with the matter, Ola Electric is making progress in its plans for an initial public offering (IPO) and has commenced discussions with investment bankers. The company has already engaged Goldman Sachs, Kotak, Citi, and Axis, although discussions are still in the preliminary stages, as confirmed by a source from one of the four banks. Legal representation will be provided by Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas.
According to a source, Ola Electric is expected to raise $1 billion in net proceeds, with a valuation of $10 billion, through its initial public offering (IPO). The company is planning to file its draft red herring prospectus (DRHP) by the end of the upcoming quarter and intends to launch the IPO by the end of the current fiscal year’s last quarter.
As per a report, the funds raised from the IPO will be utilized by Ola Electric to facilitate the scaling up of operations, support the company’s battery manufacturing plant, and enhance its scooter production capabilities. The company aims to expand its electric two-wheeler manufacturing capacity from the current 500,000 units per year to 2 million units per year.
According to sources, prominent shareholders of Ola Electric include Temasek, Softbank, Tiger Global Management, Edelweiss, Matrix Partners India, Kia Motors, and Alpha Wave Investors. Some of these investors have reportedly shown an interest in selling their stakes in the company as part of the IPO process, as revealed by a source familiar with the matter.
According to merchant banking sources cited by Business Standard, Ola Electric has successfully secured $300 million in a recent funding round, which values the company at $6 billion. The report further states that existing investor Softbank Group did not participate in this funding round. In January of the previous year, Ola Electric had raised $200 million at a valuation of $5 billion. The company has announced its plans to introduce a line of motorcycles in the coming year. Notably, Ola Electric currently holds a 34% market share in the e-scooter segment, as per Vahan data.
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