Ola Electric secures SEBI approval for IPO to raise Rs 5,500 crore

Ola Electric, the two-wheeler company led by Bhavish Aggarwal, has received approval from the Securities and Exchange Board of India or SEBI to raise funds through an initial public offering.

The IPO will consist of a fresh issue of equity shares worth up to 5,500 crore rupees and an offer for sale or OFS of 9.52 crore equity shares by promoters and investors, according to the draft red herring prospectus or DRHP.

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The Bengaluru-based company, which filed its preliminary IPO papers in December 2023, plans to list within a month, citing
favorable market conditions despite recent volatility.

Going by the draft papers, proceeds from the fresh issue will be used for capital expenditure to be incurred by the subsidiary OCT for the Ola Gigafactory project, payment of debt by subsidiary OET, investment into research and product development, expenditure for organic growth initiatives, and general corporate purposes.

Ola Electric manufactures EVs and core EV components, such as battery packs and motors at Ola Futurefactory -- manufacturing facility in Krishnagiri.

The company is in the process of building an EV hub in the Krishnagiri and Dharmapuri districts in Tamil Nadu, which includes the Ola Futurefactory, the upcoming Ola Gigafactory, and co-located suppliers in Krishnagiri district.