Ola Electric, an electric mobility startup, has reportedly showcased interest in investment banks Goldman Sachs and Kotak Mahindra Capital to assist with the upcoming IPO in early 2024.
The company aims to go public before the discontinuation of government subsidies for electric vehicles. This move sets Ola Electric apart as one of the few companies backed by venture capital entering IPO discussions within the first six months.
Ola Electric, supported by major private market investors such as SoftBank and Tiger Global, has held meetings with several domestic and foreign investment banks to initiate IPO preparations. With Kotak closely working with the startup to determine the IPO's structure, Ola Electric plans to engage at least two more investment banks at a later stage. Cyril Amarchand Mangaldas has been appointed as the legal advisor for the IPO.
Notably, the key milestones leading to the IPO include the launch of a new R&D facility called the battery innovation center in Bengaluru, spanning 500,000 square feet. Additionally, the company plans to introduce a new electric motorcycle, expanding its presence beyond the electric scooter segment.
The timing of Ola Electric's IPO aligns with its growth in sales of electric two-wheelers, with a increase of three times in sales volumes reaching 730,000 units in the fiscal year 2022-2023 (FY23), as per Redseer's electric mobility report. Ola's market share also increased to 30% in the March quarter, leading with a 22% market share for the full year.
The company is carefully considering the valuation, given the volatile nature of the electric vehicle market. Bhavish Aggarwal, the founder of Ola Electric and the cab aggregation business Ola, envisions a market capitalization of $10 billion. Ola Electric was last valued at $5 billion in January 2022. However, recent reports suggest the company raised $300 million at a $6 billion valuation.
While no specific timelines have been finalized, Ola Electric aims to launch the IPO before the upcoming elections. Sources indicate that the IPO will consist of a combination of primary and secondary share offerings.