Ola Electric IPO Cleared for Launch, Targets ₹7,250 Crore Raise

New Delhi:  If you’re keen on reaping profits from investing in IPOs, this update is tailor-made for you. Another major player is gearing up to make its mark on the stock market with an imminent IPO.

Ola Electric, renowned for its electric vehicle manufacturing, has successfully cleared the path for its IPO. SEBI has granted approval for Ola Electric’s IPO, marking a significant milestone for the company.

Set to raise a whopping ₹7,250 crore through this IPO, Ola Electric has ambitious plans in store. The company’s draft red herring prospectus (DRHP), submitted to SEBI in December 2023, received crucial observations on 10th June, paving the way for its IPO launch.

Under the proposed IPO, Ola Electric aims to mobilize funds by offering a mix of fresh issue and offer for sale (OFS). It plans to issue fresh shares worth ₹5,500 crore, while existing investors can offload shares valued at ₹1,750 crore through OFS. This strategy could potentially elevate the IPO’s total size to ₹7,250 crore.

In the OFS segment, Ola Electric’s promoter Bhavish Aggarwal intends to sell 47.3 million shares. Other stakeholders participating in the OFS include Indus Trust, Alpha Wave, Alpine, DIG Investment, Matrix, and Tekne Private.

The funds raised from the IPO-

The funds raised from the IPO are earmarked for strategic initiatives. Over ₹1,200 crore will be allocated towards expanding manufacturing capabilities, while ₹1,600 crore is reserved for research and development (R&D). Additionally, ₹800 crore will go towards debt repayment, with ₹350 crore allocated for inorganic growth.

SEBI’s approval for Ola Electric’s IPO on 10th June arrives amidst the company’s focus on enhancing operational efficiency and profitability. Recent reports indicate Ola Electric’s plans to streamline operations by potentially laying off 400-500 employees through vertical integration.

This development comes on the heels of similar restructuring efforts at Ola’s sister concern, Ola Cabs, which recently terminated 200 employees. Notably, CEO Bhavish Aggarwal and CFO Kartik Gupta had also departed from the company earlier.

For investors eyeing opportunities in IPOs, the landscape appears promising. Beyond Ola Electric, several companies including Hyundai, Bajaj Housing Finance, and NSDL are gearing up for potential IPOs and follow-on public offers (FPOs) in the near future.

Stay tuned for more updates as these developments unfold, offering potential avenues for profitable investments in the dynamic IPO market.