Ola Electric gets SEBI nod for IPO; aims to raise Rs 5,500 crore via fresh issue

Ola Electric gets SEBI nod for IPO; aims to raise Rs 5,500 crore via fresh issue


Electric two-wheeler company Ola Electric Mobility's proposed Rs 5,500 crore IPO has received approval from SEBI, paving the way for the company to enter the market. The company will spend a large part of the money raised from this on expanding the capacity of its cell manufacturing plant and accelerating research and development.

Ola Electric as well as Bain Capital-backed Emcure Pharmaceuticals have received Sebi's approval to raise funds through initial public offerings (IPOs), an update from the market regulator showed on Thursday.

Both companies had filed their initial IPO papers with SEBI in December 2023, and received their observations on June 10. In SEBI parlance, its observation means approval to go ahead with the public issue.

According to the draft red herring prospectus (DRHP), the proposed IPO of Ola Electric is a combination of a fresh issue of equity shares aggregating up to Rs 5,500 crore and an offer for sale (OFS) of up to 9.52 crore equity shares by promoters and investors.

For Ola Electric, the IPO will provide the necessary impetus to expand cell manufacturing capacity and invest in R&D on future technologies and products.

Ola Electric Mobility Ltd (OEML) plans to use ₹1,226.43 crore of the proceeds from its ₹5,500 crore public issue to expand the capacity of its cell manufacturing plant from 5 GWh to 6.4 GWh, according to its draft papers.

The company plans to use Rs 1,600 crore from the fresh funds on research and product development, while another Rs 800 crore will be used to repay debt.

OEML said in its DRHP that Phase 1(A) and Phase 1(B) of setting up and expansion of the Ola Gigafactory in Krishnagiri district of Tamil Nadu will be funded from internal accruals and long-term borrowings taken by its arm Ola Cell Technologies Pvt Ltd (OCT).

Phase 1(A) is expected to be completed by March 2024 and the gigafactory will have a capacity of 1.4 GWh. In Phase 1(B), the capacity will be increased to 5 GWh by October 2024. These will be financed from internal accruals and long-term borrowings by OCT, it said.

The second phase of expansion aims to increase the capacity to 6.4 GWh by April 2025 and to 20 GWh by the second quarter of calendar year 2026.

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

“A portion of the total amount of Rs 1,226.43 crore raised from the fresh issue will be used for financing the project,” the statement said. The boards of OCT and the company have agreed and taken note of the allotment as per their resolutions dated December 22, 2023, the statement further said.

OEML had announced a range of electric motorcycles – Cruiser, Adventure, Roadster and Diamondhead – on August 15, 2023, and deliveries of the motorcycles are expected to begin in the first half of FY2026.

On future product launch plans, the company said, “We plan to launch affordable mass market Ola S1 models including E2Ws (electric two-wheelers), targeting the personal, business-to-business and last-mile delivery segments by the first half of FY 2025.”

It further added, “We also plan to start deliveries of our motorcycles, which we announced on August 15, 2023, by the first half of FY 2026. We plan to further expand our product portfolio to cover mass-market motorcycles as well to capture a wider base of consumers across different product variants and price points in the long run.”

On Emcure Pharmaceuticals, according to the draft red herring prospectus, the proposed IPO of the company is a combination of a fresh issue of equity shares worth Rs 800 crore and an OFS of up to 1.36 crore equity shares by promoters and existing shareholders.

Those selling shares in the OFS include promoter Satish Mehta and investor BC Investments IV Ltd, an affiliate of US-based private equity major Bain Capital.

Currently, Satish Mehta holds 41.92% stake in the company and BC Investments holds 13.09% stake.

The proceeds from the fresh issue will be used for repayment of debt and general corporate purposes.



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