Paytm founder Vijay Shekhar Sharma, film director Zoya Akhtar and her actor brother Farhan, who own a significant number of shares in Ola Electric and came onto the company's cap table in 2021, will not sell in the EV maker’s upcoming initial public offering (IPO).
According to a Moneycontrol analysis, Sharma and the Akhtar duo are sitting on gains of 26 percent at the upper end of the offer price band of Rs 72-76 a share.
Their price of acquisition works out to Rs 60.36 apiece, after a bonus issue and conversion of preference shares ahead of the IPO, billed as one of the biggest in the country this year.
Shama and the Akhtar duo’s investment date is recorded as December 21, 2021. The benchmark Nifty has risen 48.32 percent since then.
Sharma, through his investment vehicle VSS Investco Private Limited, acquired seven Series C preference shares for Rs 7.5 crore. His bet is now valued at Rs 8.96 crore at the lower end of the price band and Rs 9.46 crore at the upper end of the price band.
Zoya Akhtar acquired a single Series C preference share for Rs 1.07 crore, while Farhan had bought 2 shares for Rs 2.14 crore. Ritesh Sidhwani, co-founder of film production house Excel Entertainment with Farhan, had also bought two shares in Ola Electric’s Series C round.
After the conversion of the preference shares, Sharma holds 12.45 lakh shares in Ola Electric, Zoya Akhtar 1.78 lakh, Farhan Akhtar 3.56 lakh and Ritesh Sidhwani 3.56 lakh.
Preference shares are typically used by private companies to raise funds as they give more rights to investors compared to ordinary equity shares. However, preference shares are converted to ordinary shares before an IPO.
Some pre-IPO investors in Ola Electric could be staring at potential losses because the price band for the public issue is set lower than their average acquisition price — a rare scenario for tech IPOs in recent years.
Early investors such as Tiger Global and Matrix Partners stand to enjoy multi-bagger gains.
Investors like Alpine Opportunity Fund VI LP, which bought shares at an average price of Rs 111.51, and Tekne Private Ventures XV Ltd, which bought at Rs 113.12, are likely to see over 30 percent losses at the upper price band of Rs 76 a share.
Ola Electric promoter Bhavish Aggarwal holds 1.36 billion shares, or a 36.94 percent stake, valued at Rs 10,350 crore based on the price band. He acquired this stake for a negligible amount, according to the DRHP.
At the upper price band, Ola Electric's market cap is about $4 billion (Rs 33,500 crore), down 25.8 percent from $ 5.4 billion in September. The lower valuation is due to a global tech correction and Ola's strategy to boost participation, analysts said.
The IPO, which opens for subscription on August 2, comes as the Indian market is trading at record highs.
The issue comprises a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of up to 84.94 million. On the upper price band, OFS comes at Rs 645.96 crore. The size of the issue, which closes August 6, amounts to Rs 6145.96 crore.
Ola Electric had a 35 percent market share in the electric two-wheeler (E2W) segment at the end of fiscal 2024, up from 21 percent in the previous year.
The company, which operates its direct-to-customer (D2C) omnichannel distribution network across India through 870 experience and 431 service centres, sold 3.29 lakh units in FY24, double that of 1.56 lakh vehicles in the previous year.
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