Ola Electric IPO: SoftBank-backed E2W maker raises ₹2,763 crore from anchor investors ahead of subscription

Ola Electric IPO: Ola Electric has raised ₹2,763 crore from anchor investors ahead of its IPO subscription opening for bidding. India’s largest electric two-wheeler (e2W) maker’s initial public offering (IPO) is all set to hit the D-Street for its three-day subscription on Friday, August 2, and will close on Tuesday, August 6. The price band for the pure electric vehicle (EV) player’s IPO has been fixed in the range of ₹72 to ₹76 per equity share with a face value of ₹10.

The anchor round of the SoftBank-backed public issue saw participation from a host of investors, such as foreign portfolio investors (FPIs), domestic mutual funds, and insurance companies. According to BSE data, the anchor allotment was made to over 80 domestic and foreign funds on Thursday, August 1.

Also Read: Ola Electric IPO opens tomorrow: GMP, issue details, 10 key things to know

SBI Mutual Fund (MF), HDFC MF, Nippon India MF, Sundaram MF, Bandhan MF, Bharti Axa Life Insurance Company, Kotak Mahindra Life Insurance Company, Government Pension Fund Global, Nomura India Investment Fund, Goldman Sachs (Singapore) Pte Ltd, and Fidelity were allotted shares in the anchor round.

Ola Electric IPO Details

Ola Electric’s ₹6,146 crore IPO is the biggest since the ₹21,000 crore-IPO of the state-owned Life Insurance Corp (LIC) of India in May 2022. The IPO is a combination of a fresh issue of equity shares up to ₹5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares worth ₹645.56 crore at the upper end of the price band by promoters and investors. 

This takes the total issue size to ₹6,145.56 crore. Under the OFS, Ola Electric’s founder, Bhavish Aggarwal, will sell around 3.8 crore shares. The issue’s lot size is 195 equity shares and in multiples of 195 equity shares thereafter.

Ola Electric IPO has set aside 75 per cent of its shares for qualified institutional buyers (QIB), 15 per cent for non-institutional institutional investors (NII), and 10 per cent for retail investors. The E2W has allotted 36.35 crore equity shares to 84 funds at ₹76 apiece, aggregating the transaction size to ₹2,763 crore.

OLA Electric IPO’s book-running lead managers are Bob Capital Markets Ltd., Goldman Sachs (India) Securities Private Ltd., ICICI Securities Ltd., Axis Capital Ltd., Bofa Securities India Ltd., SBI Capital Markets Ltd., and Kotak Mahindra Capital Company Ltd. Link Intime India Private Ltd. is the registrar for this issue.

Ola Electric IPO basis for share allocation is anticipated to be finalised on Wednesday, August 7. The shares will be deposited to the allottees’ demat accounts on the same day as the refund, which is scheduled to start on Thursday, August 8. Ola Electric’s share price will likely be listed on BSE and NSE on Friday, August 9.

For Ola Electric, the IPO will provide the much-needed impetus to enhance cell manufacturing capacity and research and development on future technologies and products. According to its prospectus, Ola Electric Mobility Ltd (OEML) plans to use ₹1,227.6 crore of the proceeds to expand the capacity of its cell manufacturing plant to 6.4 GWh from 5 GWh.

The company is also looking to use ₹1,600 crore from the fresh fund for research and product development, ₹800 crore to repay debts, and ₹350 crore for organic growth initiatives.

In its RHP, OEML said Phase 1 (a) and Phase 1 (b) of the establishment 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).

In the details of the objectives of the IPO, the company said a portion of the proceeds will be used for capital expenditure to be incurred by OCT for the expansion of the capacity of the cell manufacturing plant from 5 GWh to 6.4 GWh.