Ola Electric closes Rs 3,200 crore funding round in a mix of debt and equity

The fundraising was part of Ola's plans to raise around $300-$400 million ahead of its public listing plans.

Electric vehicle manufacturing major Ola Electric announced on October 26 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, the firm said in a statement.

“We are committed to developing core technologies in EVs and cell and are rapidly scaling up manufacturing to further accelerate the transition to sustainable mobility,” said founder and chief executive officer Bhavish Aggarwal.

The fundraising was part of Ola's plans to raise around $300-$400 million ahead of its public listing plans. The funding took place in multiple rounds, and in September, the EV maker closed $140 million in funding from Temasek. The remaining $240 million through debt from SBI.

Ola Electric also raised $200 million from Tekne Private Ventures, Edelweiss and others in January this year.

Moneycontrol had earlier reported that Ola Electric has roped in Kotak Mahindra Capital and Goldman Sachs to manage its initial public offering (IPO) in early 2024. At the time, sources said the planned IPO will be a combination of primary and secondary share offerings.

Meanwhile, Ola Electric's close rival, Ather, on September 6, said that the firm has raised Rs 900 crore from its existing investors, Hero MotoCorp and GIC, through a rights issue.

Ola Electric, which has a manufacturing capacity of 1 million electric vehicles per annum in Krishnagiri, Tamilnadu, is planning to double its capacity.

"In the next six to nine months, our total manufacturing capacity will go up to 2 million from the present 1 million per annum. The capacity we have right now can be expanded up to 10 million per annum and that is our ultimate goal," Aggarwal said in an earlier interaction.

The firm is planning to make motorcycles within the same facility and has set up a separate battery manufacturing unit which is in the process of making India's first lithium-ion cells.

"We have also set up a plan that is researching and making lithium-ion cells. The plan is to make 5 Gwh of cell capacity in phase 1, and we will slowly expand that," Aggarwal said.

Ola Electric saw its losses widen around 293 percent to Rs 784 crore in FY22 as against a loss of Rs 199 crore last year as its expenses zoomed to Rs 1,240 crore. The company’s expenses have gone up by around 306 percent year-on-year (YoY).

The firm reported consolidated revenue from operations of Rs 373 crore in FY22, up nearly 400 times year-on-year (YoY) against the revenue reported last financial year at Rs 0.86 crore as it began selling its two-wheeler during December 2021.