MC Exclusive: IPO-bound Ola Electric receives second product certification under PLI scheme

Under the scheme, Ola Electric is eligible for incentives for up to five consecutive financial years, commencing in fiscal 2023-24.

Ola Electric has received certification for its second product under the Production-Linked Incentive (PLI) scheme for the automobile and auto component industry, sources aware of the development told Moneycontrol, requesting anonymity.

According to the persons cited above, Ola Electric’s S1 Pro (Gen-2) received the Domestic Value Addition (DVA) certification under the Auto PLI Scheme this week, making it the second electric scooter from Ola’s stable to receive the approval. In January, the Bengaluru-based EV maker received the DVA certificate for its S1 Air scooter, making it the first two-wheeler EV maker to achieve eligibility under the scheme from the Ministry of Heavy Industries.

“The company applied for PLI certification for S1 Pro in the second half of October at ICAT, Manesar, and received the certification on February 9, 2024. Ola S1 Pro and Ola S1 Air are now eligible for subsidies under the government’s Auto PLI scheme for five years from the date of certification,” said one of the sources aware of the development.

An emailed query sent to the spokespeople at the Ministry of Heavy Industries and Ola Electric remained unanswered till the time this article went online.

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Under the scheme, Ola Electric is eligible for incentives for up to five consecutive financial years, commencing in fiscal 2023-24. The incentive would range between 13 percent and 18 percent of the determined sales value (DSV) of the products.

In December, Ola Electric filed its Draft Red Herring Prospectus (DRHP) with the market regulator, the Securities and Exchange Board of India (SEBI). It plans to raise Rs 7,250 crore through a fresh issue of shares and an offer-for-sale (OFS) of shares. Of the amount mopped up, the company has said it will use Rs 1,226 crore towards capital expenditure and Rs 800 crore towards repaying the debt.

Founded in 2015 by Bhavish Aggarwal, Ola Electric has built a gigafactory in Krishnagiri, Tamil Nadu. It further plans to expand Ola's EV business and set up India's first lithium-ion cell manufacturing facility in Tamil Nadu.

The Bangalore-based EV maker's consolidated revenue stood at Rs 2,782 crore in FY23, up nearly 510 percent from the previous year, but its net loss widened to Rs 1,472 crore, double of the Rs 784 crore that it reported in FY22.