Ahead of IPO, Ola Electric Mobility collects ₹2,763 cr from anchor investors

Electric two-wheeler company Ola Electric Mobility on Thursday said it has mobilised ₹2,763 crore from anchor investors, a day before its initial share-sale opening for public subscription.

The anchor round saw participation from a host of investors such as FPIs, domestic mutual funds and insurance companies, according to a circular uploaded on BSE's website.

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 have been allotted shares in the anchor round, it showed.

Going by the circular, the electric two-wheeler company has allotted 36.35 crore equity shares to 84 funds at ₹76 apiece, aggregating the transaction size to ₹2,763 crore.

The issue, with a price band of ₹72 to ₹76 a share, will open for public subscription on August 2 and conclude on August 6.

The company's 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 founder Bhavish Aggarwal would offload almost 3.8 crore shares.

For Ola Electric, the IPO will provide the much-needed impetus to invest in enhancing cell manufacturing capacity and research and development on future technologies and products.

According to its prospectus, Ola Electric Mobility Ltd (OEML) plans to utilise ₹1,227.6 crore out of the proceeds of its ₹5,500-crore public issue on capacity expansion 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 on research and product development, another ₹800 crore will be deployed to repay debts and ₹350 crore for organic growth initiatives.

In its RHP, OEML said the Phase 1 (a) and Phase 1 (b) of the set up 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 objects of the IPO, the company said a portion of the proceeds will be used for capital expenditure to be incurred by OCT for expansion of the capacity of cell manufacturing plant from 5 GWh to 6.4 GWh.

OEML which had on August 15, 2023, announced a line-up of electric motorcycles -- Cruiser, Adventure, Roadster and Diamondhead -- and expects to begin delivery of the motorcycles in the first half of fiscal 2026.

On future product launch plans, the company said, "We plan to further launch affordable mass market Ola S1 models, including E2Ws (electric two-wheelers) targeted at the personal, business-to-business and last-mile delivery segment by first half of fiscal 2025."

It further said, "We also plan to commence delivery of our motorcycles, which we announced on August 15, 2023, by the first half of fiscal 2026. We plan to further expand our product portfolio to also cover mass market motorcycles to capture a broader base of consumers across different product types and price points in the long run."

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