Ola Electric Mobility Ltd., the leading manufacturer of electric scooters in India, is encountering resistance from investors regarding the valuation it has set for its impending IPO. This is as per a report by Moneycontrol.
The valuation that is being aimed at by the company’s founders is reportedly $7 billion in the Mumbai listing. This would be comparable to a valuation of roughly $5 billion based on early investor feedback, according to the report.
However, as of now, considerations are going on, and no final decision has been made so far. With the $5 billion valuation, current investors might not opt to sell the existing shares.
Ola Electric aims to raise Rs 5,500 crore through its IPO; additionally, the company also plans to have an offer-for-sale component of 95.2 million shares. Recently, market regulator Securities and Exchange Board of India (SEBI) gave approval to Ola Electric for an initial public offering (IPO.
For Ola Electric, the IPO will provide the much-needed impetus to invest in enhancing cell manufacturing capacity and research and development on future technologies and products.
According to its draft papers, Ola Electric Mobility Ltd. (OEML) plans to utilize Rs 1,226.43 crore out of the proceeds of its Rs 5,500 crore public issue on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh.
Read: Ola Electric Gets Sebi Clearance for Rs 5,500-Crore IPO
The company is also looking to use Rs 1,600 crore from the fresh fund on research and product development, while another Rs 800 crore will be deployed to repay debts.
In its DRHP, OEML said Phase 1 (a) and Phase 1 (b) of the set-up and expansion of the Ola Gigafactory at Krishnagiri district in Tamil Nadu will be funded from internal accruals and long-term borrowings availed by its arm, Ola Cell Technologies Pvt Ltd (OCT).
On future product launch plans, the company said, "We plan to further launch affordable mass market Ola S1 models, including E2Ws (electric two-wheelers), targeted at the personal, business-to-business, and last-mile delivery segments by the first half of fiscal 2025."
(With inputs from PTI)
