All you need to know about the Ola Electric IPO

Ola Electric Mobility's IPO is set open on August 2, valuing company at up to $4.4 billion as India's EV market heats up.

Why it matters: This IPO marks a significant milestone for India's electric vehicle industry and could set the tone for future EV listings in the country.

Context: Ola Electric, backed by SoftBank, is India's largest e-scooter maker and was valued at $5.4 billion in its last funding round in September.

• The IPO will open for retail subscription on August 2 and close on August 6.
• Institutional investors can begin subscribing a day earlier, on August 1.

The expected valuation of $4.2 billion to $4.4 billion is 18.5% to 22% lower than Ola's previous valuation. The fresh share issue size remains unchanged at ₹55 billion ($657 million). Founder Bhavish Aggarwal will sell 37.9 million shares, 20% less than initially planned.

Where will the money go: Ola plans to utilize the IPO proceeds for several key initiatives:

• ₹1,227.64 crore for expanding the cell manufacturing capacity of its Ola Gigafactory from 5 GWh to 6.4 GWh.
• ₹800 crore to repay debt incurred by its subsidiary, OET.
• ₹1,600 crore for research and product development.
• ₹350 crore for business expansion through organic growth initiatives.

In the Numbers: Ola's financial performance shows strong growth despite widening losses:

• Revenue from operations increased 90.4% to ₹5,009.8 crore in FY24.
• Net loss widened to ₹1,584.4 crore in FY24 from ₹1,472 crore in FY23.
• Unit sales more than doubled to 3.29 lakh in FY24 from 1.56 lakh in FY23.
• Market share in the electric two wheeler segment grew to 35% in FY24 from 21% in FY23.

Bottomline: Ola Electric's robust sales growth and expanding market share underscore the rapid adoption of electric two-wheelers in India. Electric two wheelers projected to account for ~50% of domestic two-wheeler sales by FY28.

The big picture: This IPO is one of India's biggest in a year where the country's equities markets have reached multiple record highs and overtaken Hong Kong to become the world's fourth-largest bourse.

Zoom out: How this IPO performs could influence other EV makers' decisions to go public and impact investor sentiment towards the Indian EV sector.