Come August 9, Bhavish Aggarwal will be in Mumbai for the public listing ceremony of Ola Electric, the electric two-wheeler company that he founded and scaled in a short period of time.
Aggarwal, whose businesses span ride hailing (Ola Consumer), food delivery, artificial intelligence (Krutrim) and EVs, is known to be a hard-charging and ambitious entrepreneur who exerts significant control over his ventures.
But Aggarwal believes that the best companies have been built in the public markets because of the focus and the financial discipline it entails.
Edited Excerpts:
What does Ola Electric’s IPO mean for you?
I think an IPO is an important milestone in any entrepreneur's journey. However, it's just one of the milestones in creating value for everyone, and it's not the end. I would say it's ek padhav hai, wo padhav successful hona hai, aur uske baad agli journey tak jana hai (This is a stage we need to successfully cross, and then we move on to the next journey). So, that's what it means—it's an important milestone in the journey. From an EV perspective, it's significant because it brings a lot of validation to the business of future technology and electric vehicles, which will benefit the entire industry, not just us.
In terms of the response so far, what feedback are you getting from domestic institutions? Given that some of these funds also have positions in your listed competitors in the two-wheeler market. Is that making them hesitant?
I don't think public investors and private investors operate in the same way; they are very different worlds. Public investment is an open, free market where investors put their money into companies, they believe have a future and will provide returns. We've had very good conversations with investors. Our anchor book will be published tomorrow (August 1st), and you'll see for yourself.
What convinced you to lower the valuation to $4 billion? There was buzz that Ola Electric was seeking a valuation of at least $6-$7 billion. Was this due to pressure from your advisors or investors?
We never gave out any valuation numbers. It was all just the media’s commentary. This is a long-term journey and we want a broad set of investors, the Indian investors, the Indian retail, the Indian institutions, all of them to support our journey and also be part of this story.
What kind of market potential do you see for EVs going forward? Because there's also a push for hybrid vehicles?
From the fundamentals of technology, we are moving from a world dominated by the internal combustion engine (ICE) to a world where electric will power the future. Lot of these other things like hybrid, CNG, biofuels are relevant as transitionary technologies.
Because we understand the EV technology, we understand the supply chains, we understand the cost structures, we create the technology ourselves. So, we have our confidence that we can make this EV future happen faster. Whereas some companies might think that they cannot look at EVs now due to cost structure, so they choose to make hybrid or CNG,
World over now this debate is increasingly getting settled in every geography. If you see China, the number of pure EV vehicles sold are much higher than any of these transitionary fuel vehicles. If you see even parts of Europe, that's the dynamic. There are some pockets in the world like Japan, which were big on hybrid technology, so they are still sort of hung over on that. But increasingly everywhere EVs are coming on top. The EV adoption is still going high.
Were you disappointed with the Union Budget at some level as there was no mention of subsidies like extension of FAME-II subsidy?
I have been very public that the government has been very visionary and very supportive of the EV industry. And I think beyond a point, it's up to the entrepreneurs also to do their bit. The subsidy paradigm is moving from consumer subsidy to production incentives. Because. the EV awareness that was supposed to be in the consumer has been achieved. Now we need to build a supply chain in India so that we can become globally competitive in cost structure. That's where the PLI schemes come in. And that's where I believe the government again has a very strong visionary focus on bringing the EV supply chains into India.
Are you prepared mentally to become a public-listed entrepreneur? Because in the last decade, the sense is that you have complete control over the companies that you run.
The best companies in the world have been built in the public markets And whether it's because of the pressure or the focus that the public markets bring on the financial discipline or the focus that the public markets bring on the right capital allocation we as a group have always focused on financial discipline and thoughtful capital allocation. So, we believe that public markets are the right ecosystem for us to build this company, the right kind of partnerships. And we want to make sure the investors understand our long-term journey.
Were there concerns that you are perhaps spreading yourself very thin? Because you have to manage Ola Electric, you have Ola Cabs, you have Krutrim and you're also doing food delivery business through ONDC?
Jokes apart, expectations all across. We have been very honest and upfront about our ambitions and with our private market investors, as well as public investors, that our ambition is to build a group of companies for the future opportunities we see in India. And we have 3 companies Ola Cabs, we call it Ola Consumer now, Ola Electric, and Krutrim.
Now all 3 have their own individual focus areas. The way we've built this is that they have very strong teams in each company. My time depends on where the company's needs are. Ola Electric is where I'm fully involved. It's very operationally intense. Krutrim is very early. Ola Cabs is fairly mature as a company and It has its own strategic direction, but the team is able to run with that for the large part. So, a lot of my time, and my time is not 8 hours a day. My weekends are not spent playing golf in Singapore or London. My weekends are spent in my factory.
Is Ola Electric prepared for regulatory compliance, governance and scrutiny. The regulator SEBI has made remarks on Paytm and said that the regulator will make sure there won’t be any “Paytm like contamination in the market” What are your thoughts on this?
I wouldn't want to comment on Paytm specifically, but our focus has been on making sure we have a strong board, on making sure we have readiness from a financial governance, from a strategic governance, audit governance perspective. And you saw the quality of our board. These are top people who have their own reputations and respect in the world. So, governance for us is an absolute first important part.
How confident are you of a good listing?
My focus is to make sure I am building a good business in which shareholders see long-term value. And the tactical movements on the listing bump or anything is up to the market. And in the end, the market will respond. I hope we have done enough for the market to see excitement on the listing day.
What about your imports from China, will you be looking to bring that down?
Yeah, the biggest import there is the cell. And as we bring our own cell, that will go up. China does have a leadership in rare materials like Lithium and other mid-stream cell making process, we will also have to be cognizant of that. But we are also building our own roadmap on bringing the midstream into India as part of the PLI scheme.
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