In India’s biggest IPO this year, e-scooter maker Ola Electric recently revealed that it seeks to raise $734 million from its initial public offering, which is set to attract major foreign investors and highlight growing confidence in India’s financial markets.
Amid the stock market boom that India is witnessing recently, over 150 Indian companies have raised close to $5 billion through public listings since the beginning of the year. This is almost double the figure that the country recorded during the same period last year, LSEG data shows.
India’s e-scooter market leader
Ola Electric’s IPO will raise investor bets on a clean energy push by the government and other major firms including Tata Motors, TVS Motor and Hyundai Motor.
Ola Electric, backed by SoftBank, has grown to become the biggest player in India where adoption of clean vehicles is still low. As of June 30, the company has a 46 percent share of the e-scooter market despite the decline in its sales goals last year.
In addition, the company had plans to start selling an electric car in 2024. However, those plans are now on hold amid a shift in focus to e-scooters, EV battery cells and electric bikes.
The company’s chairman also added that Ola had a good product lineup in place for e-motorbikes.
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Company valued at $4 billion
A term sheet for the IPO, which will run from August 1 to 6, values Ola Electric at $4 billion. That valuation is around 25 percent lower than Ola’s last funding round in September, led by Singapore’s investment firm Temasek, which valued the EV maker at $5.4 billion. In the IPO, Ola Electric will issue new shares to raise $657 million while existing investors offload their stake of about $77 million to IPO investors.
The loss-making company also revealed the price band of 72 rupees to 76 rupees ($0.86-$0.91), with a discount of seven rupees a share for some eligible employees. In addition, Ola Electric will reserve 10 percent of the IPO for retail investors, with proceeds going to fund capital expenditure and research and development efforts.
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