In a significant development, Ola Electric, the leading electric two-wheeler manufacturer in India, has officially converted from a private limited company to a public one, as per regulatory filings released on Friday.
This strategic move precedes the company’s planned initial public offering (IPO) and is accompanied by a change in the company’s name to Ola Electric Mobility Limited from its previous designation as Ola Electric Mobility Private Limited.
Ola Electric holds the largest market share in the electric scooter segment in India, boasting nearly 35% of the market. The company has been diligently working towards its IPO, with reports suggesting a target date for the public listing by the end of 2023. The firm’s ambitious plans include filing the draft red herring prospectus within the current month, as part of the preparations for the IPO.
As Ola Electric gears up for its public debut, it is also restructuring its board of directors. Notable candidates, such as former Airtel chief executive Manoj Kohli, Mensa brands founder Anant Narayan, and YourStory founder Shradha Sharma, are expected to join the board as independent directors.
Sources indicate that Ola Electric is eyeing a valuation between $7 billion and $8 billion for its IPO, ideally aiming for a listing by March 2024, strategically timed just ahead of India’s national elections.
The company is actively taking steps to achieve this goal, having recently closed a $240-million debt financing round with the State Bank of India on October 26, as part of a larger $384-million financing round comprising both debt and equity.
The funds raised will play a crucial role in expanding Ola Electric’s manufacturing capacity for two-wheelers and facilitating the launch of electric motorcycles and cars. Additionally, the company aims to establish India’s first lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu.
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As of now, Ola Electric’s majority shareholder is Bhavish Aggarwal, holding approximately 36.6% of the shares, followed by SoftBank at 23.6% and Tiger Global at 6.29%, according to market research and data platform Tracxn.
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In the competitive landscape of the electric two-wheeler segment, Ola Electric faces competition from Ather Energy, which holds the second-largest market share. Both companies have experienced growth in sales, with Ola Electric selling 22,284 vehicles in October, up from 18,691 vehicles in September, according to government data. Ather Energy sold 8,025 vehicles in October, compared to 7,151 vehicles the previous month.
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Despite challenges such as government subsidy cuts affecting electric scooter prices, Ola Electric remains optimistic about the future. The company recently launched the Ola S1 X scooter model in August and has plans to introduce electric bikes in four variations by the end of 2024. The dynamic developments in the electric two-wheeler market indicate a promising trajectory for Ola Electric as it continues to make strides towards a groundbreaking IPO.
