Ola Electric to file DRHP with SEBI by Dec 20, looks to raise $700 million via IPO

Ola Electric aims to achieve a valuation ranging between $7-8 billion by early 2024. (Representational image)

Ola Electric is preparing to submit its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) by December 20, CNBC-TV18 reported on December 11. The move comes as part of the company's plans to raise a substantial $700 million through its Initial Public Offering (IPO), the report added.

The SoftBank-backed company aims to achieve a valuation ranging between $7-8 billion by early 2024. The funds raised through the IPO are for the expansion of Ola Electric's EV business and the establishment of a lithium-ion cell manufacturing unit.

Ola Electric made headlines recently as it reportedly reduced its sales targets for the period of 2023-2025 by over 50 percent and postponed its profitability target by a year. This decision was attributed to the impact of diminished government incentives, leading to an increase in e-scooter prices. The current fiscal year's revenue target has been revised to $591 million, a reduction of approximately 60 percent from the initial target of $1.55 billion, as per the report.

Ola Electric transformed itself into a public company on November 17 as a crucial step in preparation for its IPO. This significant milestone involved corporate restructuring and has led to the change in the company's name from Ola Electric Mobility Private Limited to Ola Electric Mobility Limited.

The conversion of a private limited company to a public company is a requisite process for companies intending to be listed on the stock exchange.

Moneycontrol had previously reported that Ola Electric has roped in Kotak Mahindra Capital and Goldman Sachs for an IPO in early 2024. At the time, sources said the planned IPO would be a combination of primary and secondary share offerings.

Recently, the electric vehicle manufacturing major announced that it has closed a Rs 3,200 crore (approximately $380 million) funding round with a mix of debt and equity from Temasek-led prominent investors and debt from the State Bank of India (SBI). The funds raised will be used to expand Ola's EV business and to set up India's first lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu.

Ola Electric in February 2023 expanded its scooter portfolio to five products.