Ola Electric Accelerates Plans for IPO, Aiming to Raise Around $700M Raise!

Ola Electric, under the leadership of Bhavish Aggarwal, is gearing up for its initial public offering (IPO) early next year. In a move to bolster its market position, the electric two-wheeler manufacturer plans to file draft share sale papers within the next two weeks, with a deadline set before December 20 to facilitate the IPO before the upcoming general elections.

Valuation and Funding

The Bengaluru-based company was last valued at $5.4-5.5 billion in October after securing $384.43 million in funding, including $240 million in debt from investors like Temasek and the State Bank of India. Ola Electric now seeks a higher valuation of nearly $8-10 billion in its upcoming public offering, aiming to raise around $700 million.

Despite intensified competition from TVS Motor Company, Bajaj Auto, and Hero MotoCorp, Ola Electric has maintained its market leadership in India's electric two-wheeler market for the past 12 months. Recent data from the vehicle registration dashboard Vahan indicates Ola Electric secured a 32.6% market share with 29,764 units registered. TVS Motor held the second position with a market share of 20.8%, followed by Bajaj Auto at 12.8%, Ather Energy at 10.1%, and Greaves Electric (formerly Ampere) at 4.8%.

While Ola Electric sold 150,000 e-scooters in FY23, the company has adjusted its sales estimates to 900,000 units in FY25 and 300,000 units in FY24. Financial projections for Ola's FY25 business model suggest an improvement in EBITDA margins from negative 157% in FY22 and negative 43% in FY23 to a positive 6.6% in FY26.

Aggressive Retail Strategy

To solidify its market position, Ola Electric is implementing an aggressive retail strategy. This includes launching products at a discount and reducing the prices of existing products. The most affordable offering, the S1 X+, now comes with a flat ₹20,000 discount, making it one of the most competitively priced e-scooters in the market.

Despite Ola Electric's efforts, competitors like Bajaj Auto and Hero MotoCorp are gaining market share by scaling up production, expanding distribution, and launching new, revamped products. This competitive landscape is shaping the dynamics of the electric two-wheeler segment in India.

Final Words

The company's strategic moves, valuation targets, and competitive market dynamics will be closely watched as Ola Electric aims for a successful IPO. The aggressive retail strategy and adjustments in sales estimates indicate a proactive approach to navigating the evolving landscape of the electric two-wheeler market in India.