SoftBank-backed e-scooter startup seeks 61.5 billion rupee India IPO
OLA Electric Mobility, India’s biggest e-scooter maker, is seeking as much as 61.5 billion rupees (S$986.8 million) in an initial public offering (IPO) that will test investor appetite for the electric vehicle (EV) makers amid increasing adoption.
The startup, backed by SoftBank Group and Tiger Global Management, has set a price range of 72 rupees to 76 rupees a share, the company said in an advertisement in a local newspaper. The bidding starts on Aug 2 and closes on Aug 6, while shares are expected to start trading on Aug 9.
The company is issuing as many as 723.8 million shares, according to the terms of the listing seen by Bloomberg News. Existing shareholders are selling up to 84.9 million shares, fewer than the 95.2 million previously planned.
The share sale will fuel the company’s expansion plans, as founder Bhavish Aggarwal builds what he touts as the world’s largest EV hub to produce battery-powered two-wheelers, cars and lithium-ion cells. The Bengaluru-based firm plans to expand capacity at its cell manufacturing plant, repay debt and invest in research, it said in the offer document.
The unprofitable Ola Electric is the latest to tap equity investors in India’s booming IPO market – one of the hottest spots globally this year as surging valuations and good economic prospects lure issuers. IPOs in India have raised US$4.5 billion so far this year, more than double the amount in the same period last year, according to data compiled by Bloomberg.
EV-linked firms are increasingly looking at public markets to raise money amid growing demand for alternative fuel vehicles in India. The local unit of Hyundai Motor Co is expected to list this year, in what could be the biggest IPO in India so far. Other EV-linked firms, such as Ather Energy and Tata’s battery business Agratas are also aiming for a listing.
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Ola Electric aims to capture mass as well as premium segments of India’s two-wheeler market, Aggarwal told reporters in a briefing on Monday. He declined to give a pathway to profitability.
Potential valuation
At the upper end of the marketed range, the listing would give Ola a market value of about US$4 billion, according to the terms. The company’s founder was seeking a potential valuation of as much as US$7 billion in a Mumbai listing before facing investor pushback, Bloomberg News reported last month.
Aggarwal is selling as much as 38 million shares – the biggest chunk – while SoftBank’s Vision Fund 2 is selling up to 23.9 million shares and Tiger Global’s Internet Fund III is selling up to 6.4 million shares.
Ola Electric sold 35 per cent of all electric two-wheelers in India in financial year ending Mar 31. It has an electric motorbike as well as India’s cheapest e-scooter as a part of its product line-up. The firm raised US$385 million in October last year for expansion and to set up a lithium-ion cell plant.
Axis Capital, BofA Securities, BOB Capital Markets, Citigroup Global Markets India, Goldman Sachs (India) Securities, ICICI Securities, Kotak Mahindra Capital and SBI Capital Markets are bookrunning lead managers for the IPO. BLOOMBERG
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