Ahead of IPO, Ola electric slashes sales target: Report

Ola Electric IPO: Ola Electric has slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, reported Reuters. This after, e-scooter prices went up as the government incentives were reduced.

Ola has been planning a $700 million IPO, even though the company has been leading the small yet fast growing e-scooter market.

Cut in incentives

In May, the government had cut the cash incentives available for e-scooter buyers without giving an explanation. Ola's CEO Bavish Aggarwal had also said that the reduced incentive would be a "short-term blip" for sales while the company said the move would "have no impact on volumes".

India now offers 15% of the price before tax as incentives for e-scooters, compared with 40% earlier, leading to higher prices.

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However, a document as seen by Reuters, with Ola's latest financial projections shows it now expects to record 300,000 e-scooter sales in the ongoing fiscal year to March 2024, two-thirds lower than the earlier goal of 882,000 which Reuters reported in July.

The revenue target is also cut down to $591 million from the earlier goal of $1.55 billion. Before the cut in incentive, Ola which was a loss-making entity was expecting a profit $220 million in the ongoing 2023-24 fiscal year. However, as per the reversed target, the company is expected to record an operating loss of $92 million this year, and a profit of $111 million next year.

Ola will sell 900,000 units in 2024-25 and 2.3 million units in 2025-26, the new document showed. Those targets are 60% and 21% lower than earlier estimates when incentives were in place.