Ola Electric first e-scooter company to get PLI nod

The electric scooter maker is looking to tap equity markets to raise Rs 5,500 crore

The Ministry of Heavy Industries (MHI) has certified that IPO-bound Ola Electric is eligible to receive subsidies under the production-linked incentive (PLI) scheme, sources close to the company told Moneycontrol, requesting anonymity. With this, Ola Electric has become the first e2W (electric two-wheeler) company to be certified under the scheme, which includes several other applicants such as Hero MotoCorp, TVS Motor Company, and Bajaj Auto, among others. According to the above sources, the certification was granted on 27 December and the entire process took four months.

The PLI scheme provides financial incentives to companies in order to boost domestic manufacturing, with the twin objective of making products more competitively priced and reduce dependency  on imports. A company spokesperson did not respond to a request for comments.

Also Read: How the new PLI scheme is likely to boost the EV industry

“Ola Electric successfully met the eligibility  criteria, such as minimum 50 percent domestic value addition in its vehicles," said a person aware of the matter, and added, “For  e2W startups, fresh investment of Rs 1,000 crore is required to avail of the PLI scheme, while OEMs must have a minimum revenue of Rs 10,000 crore.” Industry experts estimate that the incentive payout will be up to 18 percent of the sales value.

The electric scooter maker is looking to tap equity markets to raise Rs 5,500 crore through its initial public offer (IPO). Existing shareholders will sell another Rs 1,750 crore worth of stock via an OFS (offer for sale). Ola Electric is now in pole position in the e2W segment with 33 percent market share, followed by  TVS Motor, Bajaj Auto and Ather Energy.