Ola Electric Mobility Aims to Raise $661 Million in IPO

Ola Electric Mobility, an Indian electric scooter manufacturer, is set to raise 55 billion rupees ($661 million) through an initial public offering (IPO), signaling its ambitions to enter the electric car market.

The company plans to use the IPO proceeds to expand the manufacturing capacity of its electric vehicle cell factory and invest in research and development, Bloomberg reported Friday (Dec. 22), citing a prospectus filed with Kotak Investment Banking.

Ola intends to increase the factory’s capacity from 5 gigawatt hours to 6.4 gigawatt hours, according to the report. Additionally, the company may consider raising 11 billion rupees ($132 million) through a pre-IPO placement of shares to repay debt and further invest in research and development.

Founder Bhavish Aggarwal is spearheading Ola’s plans to establish the world’s largest electric vehicle hub in southern India, focusing on producing battery-powered two-wheelers, cars and lithium-ion cells, the report said.

Ola has already made significant strides in the electric scooter market, becoming India’s largest electric scooter company with a third of the market share, per the report.

However, expanding into the electric car and EV cell markets presents new challenges, according to the report.

Electric cars accounted for only 1.3% of total passenger vehicles sold in India last year, and Ola will face intense competition from established car manufacturers like Tata Motors and Mahindra & Mahindra, as well as the potential entry of Tesla into the Indian market, the report said.

Ola believes that localizing electric vehicle parts, including cells, will give them more control over quality and costs, per the report.

The IPO comes after Ola raised 32 billion rupees in October through equity funding and debt, with investors such as Temasek Holdings leading the funding round, according to the report. This funding aimed to support the expansion of Ola’s operations and the establishment of a 115-acre cell plant.

It was reported in July that Ola was accelerating its plans for an IPO due to its success in India’s electric scooter market.

“I thought it would take me four to six years of revenue to go public,” Aggarwal said at the time. “Now I can feel that it will be much earlier.”

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