Ola Electric IPO: A Deep Dive into the Future of Sustainable Transportation

Ola Electric's upcoming initial public offering (IPO) is creating considerable buzz in the financial world. Ola Electric Mobility Limited, a key player in the electric vehicle (EV) industry, is gearing up for its debut on the stock market with a significant offering. The IPO aims to secure approximately ₹6,145.56 crores, which includes a fresh issuance of ₹5,500.00 crores from 72.37 crore shares and an offer for sale (OFS) amounting to ₹645.56 crores through 8.49 crore shares. Shares are being offered within a price range of ₹72 to ₹76 each. 

About Ola Electric Mobility Ltd

Founded in 2017, Ola Electric Mobility Limited has quickly emerged as a significant contender in the electric vehicle (EV) sector. The firm focuses on producing electric vehicles and vital components like battery packs, motors, and vehicle frames at its advanced Ola Future Factory. Ola Electric employs a business model that capitalizes on three scalable frameworks: an R&D and Technology Platform dedicated to internal EV innovation, a Production and Supply Chain Platform designed for adaptable manufacturing processes, and a Direct-to-Consumer Omnichannel Sales Platform that facilitates seamless physical and online sales integration.

Product Line and Launches

Since it was established, Ola Electric has significantly broadened its range of products.

• Ola S1 Pro: The initial electric vehicle model was released in December 2021.
• Ola S1 Series: Comprising of the Ola S1, Ola S1 Air, Ola S1 X, and Ola S1 X+.
• New EV Models and Motorcycles like the Diamondhead, Adventure, Roadster, and Cruiser were announced for August 2023.

During the fiscal year 2023, Ola Electric prioritized exports, exporting around 75% of its two-wheelers to Africa, Latin America, and Southeast Asia. Electric two-wheelers were not widely available in the company's home market. There will be 959 Ola Electric employees by March 31, 2024, including 907 permanent employees and 52 freelancers specializing in research, product development, vehicle design, and software development.

Ola Electric Mobility IPO Details

Investment Requirements

Rеtail Invеstors:

• Minimum Invеstmеnt: ₹14,820 for 195 sharеs
• Maximum Invеstmеnt: ₹192,660 for 2,535 sharеs

Small and Non-Institutional Invеstors (sNII):

• Minimum Lot: 14 lots (2,730 sharеs) for ₹207,480
• Maximum Lot: 67 lots (13,065 sharеs) for ₹992,940

Big and Non-Institutional Invеstors (bNII):

• Minimum Lot: 68 lots (13,260 sharеs) for ₹1,007,760

IPO Reservation Details

• QIB Shares Offered: At least 75% of the Net Issue 
• Retail shares available: Up to 10% of the Net Issue 
• HNI (NII) Shares Offered: Up to 15% of the Net Issue

Ola Electric Mobility Limited Financials

All Amounts in Crores

• Ola Electric Mobility Limited experienced an 88.42% increase in revenue, with profit after tax (PAT) declining by 7.63% for the financial year ending March 31, 2024, in comparison to March 31, 2023
• The Ola Electric IPO has a market capitalization of ₹33,521.75 crore.
• The Return on Networth (RoNW) is currently at a negative 78.46%.
• The Price-to-Book Value (PBV) stands at 13.72.
• Before the IPO, the Earnings Per Share (EPS) was -4.3, while it was -3.59 after the IPO.
• The Price-to-Earnings (P/E) ratio stands at -17.69 before the IPO and -21.16 after the IPO.

Objectives of Ola Electric Mobility Limited IPO

The company intends to utilize the net funds raised from the IPO for the following objectives:

• Increase capital expenditure for its subsidiary, OCT, to boost the cell manufacturing plant's capacity from 5 GWh to 6.4 GWh in phase 2 of the expansion project.

• Settle or pay off, either partly or completely, the debts acquired by its subsidiary, OET.
• Invest in research and development for product innovation.
• Support expenditure for initiatives designed to promote organic growth.
• Allocate funds for general corporate purposes.

Ola Electric Mobility IPO Peer Comparison

Comparison of Ola Electric Mobility Limited with similar publicly listed companies as of March 31, 2024

Source: Financial information from annual reports/results for the year ending March 31, 2024.

• Ola Electric: Information from Restated Consolidated Financial Statements for the year ending March 31, 2024.
• EPS: Basic/Diluted EPS from financial statements for the year ending on March 31, 2024.
• RoNW: Net profit after tax divided by total equity; loss for the year divided by Net Worth as of March 31, 2024.
• NAV: The total equity divided by the number of outstanding shares at the end of the year.
• P/E Ratio: The closing market price on NSE (July 25, 2024) divided by Diluted EPS n.
• EV: T Total Market Capitalization plus Net Adjusted Debt; Market Cap equals Offer Price multiplied by post-offer shares.