Ola Electric Plans Major IPO Amid Market Boom

Ola Electric, a prominent Indian e-scooter manufacturer, announced its intention to raise $734 million in what is set to be the largest domestic initial public offering (IPO) of the year. The company, backed by SoftBank, has seen its valuation drop to $4 billion, prompting interest from foreign investors. This IPO comes at a time when India's stock market is thriving, with over 150 companies collectively raising nearly $5 billion through public listings in the first half of 2024, nearly double the amount from the same period last year. As the first IPO from an Indian electric vehicle maker, Ola Electric's offering allows investors to engage in the country's clean energy transition, which is a key focus of Prime Minister Narendra Modi's administration. The company has established itself as a leader in the e-scooter market, holding a 46% share despite having reduced its sales targets last year. With e-scooter prices starting around $900, Ola Electric is positioned to capitalize on the growing demand for clean vehicles in India. In the upcoming IPO, Ola plans to issue new shares to raise approximately $657 million, while existing investors will sell around $77 million worth of shares. Notably, 10% of the IPO is reserved for retail investors, with the proceeds earmarked for capital expenditures and research and development initiatives. Despite its market success, Ola Electric reported a significant loss of 15.84 billion rupees ($189 million) before tax for the fiscal year 2023-24, highlighting the challenges it faces in a competitive landscape.