Ola Electric Mobility Limited IPO

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They are a leading electric vehicle (EV) player in India, committed to building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. Their manufacturing operations are centered at the Ola Futurefactory, where they produce EVs and core components such as battery packs, motors, and vehicle frames. Their business strategy focuses on capitalizing on the growing demand for electric mobility in India, with future plans to expand into select international markets.

Product Line and Milestones

Since their first product announcement in August 2021, they have introduced seven EV models and announced four new ones. Their product delivery timeline includes:
i. Ola S1 Pro: Launched in December 2021.                          ii. Ola S1: Launched in September 2022.
iii. Ola S1 Air: Launched in August 2023.                             iv. Ola S1 X+: Launched in December 2023.
v. Ola S1 X (2 kWh, 3 kWh, 4 kWh): Launched in May 2024.

On August 15, 2023, they also announced a line-up of motorcycles comprising four models: Diamondhead, Adventure, Roadster, and Cruiser, with deliveries planned for the first half of Fiscal 2026.

Distribution Network

They operate a robust direct-to-customer (D2C) omnichannel distribution network across India. As of March 31, 2024, their network comprises:
i. 870 experience centres                        ii. 431 service centres (with 429 located within experience centres)
iii. Ola Electric website

This network was the largest company-owned network of experience centres in India as of March 31, 2024.

Future Outlook

They are strategically positioned to leverage the growing demand for electric mobility in India. Their focus on in-house innovation, extensive manufacturing capabilities, and a comprehensive distribution network underpins their growth strategy. With plans to expand their product line and explore international markets, they are committed to driving the future of electric mobility.

Objects of the Ola Electric Mobility Limited IPO:

The company proposes to utilise the Net Proceeds towards funding the following objects: i. Capital expenditure to be incurred by its Subsidiary, OCT for expansion of the capacity of its cell manufacturing plant from 5GWh to 6.4 GWh, classified as phase 2 under the expansion plan(the "Project"); ii. Repayment or pre-payment, in full or part, of the indebtedness incurred by its Subsidiary, OET; iii. Investment into research and product development; iv. Expenditure to be incurred for organic growth initiatives; and v. General corporate purposes. Total number of share issue are :- i. Fresh issue is 723,684,210 shares, ii. Offer for sale is 84,941,997 shares.
DRHP of Ola Electric Mobility Limited IPO
RHP of Ola Electric Mobility Limited IPO

Ola Electric Mobility Limited IPO Details:

Open Date: Aug 02 2024
Close Date: Aug 06 2024
Total Shares: 808,626,207
Face Value: ₹ 10 Per Equity Share
Issue Size: 6,145.56 Cr.
Lot Size: 195 Shares
Issue Price: ₹ 72 - 76 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 09 2024

Promoters And Management:

Bhavish Aggarwal is the Founder, Chairman and Managing Director and the Promoter of the Company. He holds a bachelor’s degree of technology in computer science and engineering from the Indian Institute of Technology, Bombay. He founded Ola Cabs, a ride hailing platform operated by ANI Technologies Private Limited in 2010 and is currently the Chairman and Managing Director of ANI Technologies Private Limited. He was named in the list of ‘India 30 under 30’ by Forbes India in 2014, in the top 100 most influential people under ‘Pioneers’ category by Time Magazine in 2018, in the TIME100 Climate List in 2023 and in EMobility+ Power 100 2024 list at EMobility+ Leadership Awards 2024. Further, he was awarded ‘Entrepreneur of the Year’ by Economic Times in 2017. Krishnamurthy Venugopala Tenneti is a Non-Executive Director of the Board. He holds a bachelor’s degree in technology in electrical engineering (H.C.) from the Indian Institute of Technology, Madras and a post-graduate diploma in business administration from Indian Institute of Management, Ahmedabad. He has been an advisor to the board of ANI Technologies Private Limited since 2017 and a director on the board of Indegene Limited since 2008 and has experience in management advisory. Arun Sarin is a Non-Executive Director of the Board. He holds a bachelor’s degree of technology in metallurgical engineering from the Indian Institute of Technology, Kharagpur and a master’s degree in science, materials science and engineering and in business administration from the University of California at Berkeley. He was previously associated with Vodafone Group Plc as chief executive officer. He was named ‘Global Indian of the Year in 2007’ by CNN/IBN and was named an Honorary Knight Commander of the Civil Division of the Order of the British Empire by Queen Elizabeth II in January 2010.

Financials of Ola Electric Mobility Limited IPO:

Particulars ( In Crores )
2022
2023
2024
Revenue from Operations 373 2,631 5,010
Other Income 83 152 233
Total Revenue 456 2,783 5,243
Cost of Material Consumed 585 2,505 4,391
Purchase of stock-in trade 56 139 70
Change in inventories -160 -74 -81
Employees Benefit Expenses 282 427 439
Other Expenses 410 886 1,459
EBITDA -718 -1,101 -1,034
OPM (%) -157.27% -39.55% -19.72%
Depreciation & Amortisation 49 167 358
EBIT -767 -1,268 -1,392
Finance Cost 18 108 187
PBT -784 -1,472 -1,584
Tax 0 0 0
PAT -784 -1472 -1584
NPM (%) -171.86% -52.90% -30.22%
No.of Shares 441.07 441.07 441.07
EPS -1.77 -3.33 -3.59

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Ola Electric Mobility Limited 5,010 -1,584 -3.59 -21.2 76 33,522
TVS Motors 39,145 1,779 35.50 75.3 2,585 1,22,850
Eicher Motors 16,536 4,001 146.13 34.0 4,967 1,35,931
Bajaj Auto 44,870 7,708 276.10 33.9 9,734 2,71,782
Hero MotoCorp 37,789 3,742 187.31 28.4 5,370 1,07,262
* All the data is as per FY24.

Recommendation on Ola Electric Mobility Limited IPO:

Review and Recommendation of Ola Electric Mobility by team IZ is 4/10. 1. Business Model of the Company Ola Electric Mobility Limited operates on a vertically integrated business model founded on three scalable platforms: i. R&D and Technology Platform: This includes in-house design and development across EV technologies and components. ii. Manufacturing and Supply Chain Platform: A vertically integrated manufacturing ecosystem with co-located and localized suppliers, focused on core EV components like battery packs, motors, and vehicle frames. iii. D2C Omnichannel Distribution Platform: An integrated company-owned sales and service network, charging network, and online retail platform. 2. Industry Analysis India is emerging as a global manufacturing powerhouse in the automotive industry, with a significant transformation driven by EVs. Key factors include: i. Government incentives and policies like the National Electric Mobility Mission Plan (NEMMP) 2020, FAME scheme, and production-linked incentive (PLI) schemes. ii. India's automotive market size, comprising annual production of around 28 million vehicles as of FY 2024, with a strong position in 2W (two-wheelers) and 4W (four-wheelers). iii. Global export opportunities for Indian E2W (electric two-wheeler) OEMs. 3. Main Risk Factors i. Incurring losses and negative cash flows since inception. ii. Limited operating history with no assurance of cost-effectiveness and profitability. iii. Heavy investment in R&D with uncertain returns. iv. Disruptions in the supply or price increases of components and raw materials. v. Dependency on government incentives which, if reduced or eliminated, could impact demand and competitiveness. vi. Risks related to product defects, quality issues, and supply chain constraints. 4. Object of the Issue The primary objectives of the Fresh Issue include: i. Capital expenditure for expanding the capacity of the cell manufacturing plant from 5 GWh to 6.4 GWh. ii. Repayment or pre-payment of indebtedness. iii. Investment in research and product development. iv. Expenditure on organic growth initiatives. v. General corporate purposes. 5. P&L of the Last 3 Years Fiscal 2024: i. Revenue: ₹28,250.00 million                          ii. EBITDA: ₹(5,330.87) million iii. PAT: ₹(15,844.00) million                             iv. EPS: ₹(3.59) Fiscal 2023: i. Revenue: ₹20,720.79 million                          ii. EBITDA: ₹(10,072.71) million iii. PAT: ₹(14,720.79) million                             iv. EPS: ₹(3.33) Fiscal 2022: i. Revenue: ₹12,841.50 million                          ii. EBITDA: ₹(3,849.54) million iii. PAT: ₹(7,841.50) million                              iv. EPS: ₹(1.77) 6. Conclusion Ola Electric Mobility Limited is positioned to capitalize on the growing EV market in India through its vertically integrated business model and strong focus on technology and innovation. Despite facing significant risks, including financial losses and reliance on government incentives, the company's strategic initiatives in expanding manufacturing capacity, investing in R&D, and leveraging government policies for growth present substantial opportunities. The IPO proceeds will primarily be used to enhance production capabilities, repay debts, and fund research and development, setting a foundation for long-term growth and market leadership in the EV sector.

Lead Manager of Ola Electric Mobility Limited IPO:

  1. Axis Capital Limited
  2. BOB Capital Markets Limited
  3. BofA Securities India Limited
  4. Citigroup Global Markets India Private Limited
  5. Goldman Sachs (India) Securities Private Limited
  6. ICICI Securities Limited
  7. Kotak Mahindra Capital Company Limited
  8. SBI Capital Markets Limited

Registrar of Ola Electric Mobility Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Ola Electric Mobility Limited Regent Insignia, #414, 3rd Floor, 4th Block 17thMain100 Feet Road, Koramangala Bengaluru 560034 Phone: +91 80 3544 0050 Email: ipo@olaelectric.com Website: https://www.olaelectric.com/

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