Ola Electric IPO: Review, Valuation, Date & GMP

Ola Electric Mobility Limited IPO-Complete Overview

Ola Electric Mobility Limited IPO a Mainboard IPO is a book-built issue of Rs.6,145.56 crores by Ola Electric Mobility Limited which was established in the year 2017. It is an electric vehicle (EV) manufacturer primarily using the Ola Futurefactory to produce EVs and certain key EV components such as motors, battery packs, and vehicle chassis.

As of FY 2024, India has a massive car market, with around 28 Million vehicles sold each year, accounting for approximately 35% of manufacturing GDP and around 7% of total GDP in FY 2023. It is essential for the Indian economy as well as the automobile region.

The company has announced six new goods and released four since August 2021. The first electric vehicle (EV) model, the Ola S1 Pro, was delivered in December 2021. The Ola S1, Ola S1 Air, and Ola S1 X+ were then released in the following years. They debuted new electric scooter versions and the Diamondhead, Adventure, Roadster, and Cruiser motorbike models on August 15, 2023.

By October 31, 2023, the organization had its omnichannel direct-to-customer ("D2C") distribution network operating throughout India, with 414 service centers and 935 experience centers (410 of which are situated within experience centers), as well as the website for Ola Electric.

With a small domestic E2W supply, about 75% of India's 2W exports in Fiscal 2023 were going to Southeast Asia, LATAM, and Africa. The R&D and technology platform, which includes in-house design and development for EV technologies and components, the flexible manufacturing and supply chain platform, and the D2C omnichannel distribution platform are the three key scalable platforms around which the business model is built.

The corporation employed 974 people on and off the rolls that were dedicated to research and development as of October 31, 2023. They are committed to software engineering, vehicle development, and product development.

The company plans to launch its Mainboard IPO on 2 August 2024.

 

 

Ola Electric IPO Overview

Ola Electric Mobility IPO (Ola IPO) of Rs.6,145.56 crore comprises an offer for sale (OFS) of 8.49 crore Shares amounting to Rs.645.56 crore and a Fresh Issue of 72.37 crore Shares (amounting to Rs.5500 crore) out of which 10% is allocated to retail investors, 75% to institutional investors and 15% to non-institutional investors. 

The IPO will be available to investors on August 2, and conclude on August 6. The anticipated listing date for the IPO is Friday, August 9, and it will be held on the BSE and NSE. The price band of the share is Rs.72 to Rs.76.

If You want to apply for the IPO, Click Here to Open a Demat Account.

 

Company Financial

Ola Electric Mobility Limited's revenue climbed by 88.42%, while profit after tax (PAT) decreased by 7.63% during the fiscal years ending March 31, 2024, and March 31, 2023. 

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2024.

• The company’s total revenue is over Rs.5,243.27 crore.

• The net worth of the company is Rs.2,019.34 crore.

• The company's EBITDA is Rs.-10,401.91 crore.

• The total assets of the company are Rs.7,735.41 crore.
  
  

(Amount in crore)

Period	31 Mar 2024	31 Mar 2023	31 Mar 2022
Total Assets	7,735.41	5,573.17	5,395.86
Total Revenue	5,243.27	2,782.70	456.26
PAT	-1,584.40	-1,472.08	-784.15
Net worth	2,019.34	2,356.44	3,661.45
Reserve & Surplus	-2,882.54	-1,380.03	-68.83
Total Borrowings	2,389.21	1,645.75	750.41

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in crore)

Net Cash flow in various Activities	FY 2024	FY 2023	FY 2022
Net Cash Flow Operating Activities	-6,330.87	-15,072.71	-8,849.54
Net Cash Flow Investing Activities	-11,362.76	-3,185.50	-13,218.25
Net Cash Flow Financing Activities	15,899.61	6,587.04	30,848.27

 

 

Revenue Bifurcation Of EV Scooter Models

 

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Capital outlay to be made by its subsidiary, OCT, to increase the cell production plant's capacity from 5 GWh to 6.4 GWh; this is categorized as phase 2 of the expansion plan (the "Project").

• Repayment or prepayment of the debt that its subsidiary, OET, incurred, in whole or in part.

• Expenditure on product development and research.

• The amount would be spent on efforts for organic growth.

• General corporate purposes.
  
  

Peers of Ola Electric Mobility Limited

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E
TVS Motors	1	35.50	68.99x
Eicher Motors	1	146.18	33.58x
Bajaj Auto	10	272.70	34.02x
Hero MotoCorp	2	187.36	28.89x

 

Evaluation

The price of this IPO is Rs.72 to Rs.76 for each share.

Evaluation of P/E Ratio

Considering the FY ended 31 March 2024, with EPS of Rs.-4.35 from the last year, the resulting P/E ratio is -17.47x.

Considering the weighted EPS of Rs.-3.85 for the last three years, the P/E ratio is -19.74x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 41.37.

Particulars	P/E Ratio
Highest	68.99
Lowest	28.89
Average	41.37

In simple words, the P/E ratio of Ola Electric Mobility Limited-IPO (-17.47x) is negative when compared with the industry’s average P/E of 41.37x, so we can not conclude based on the PE ratio whether it is overvaluation or undervaluation. 

 

Detailed Video:

 

IPO's Strengths

• By Fiscal 2028, it is anticipated that E2W usage in India will have increased from roughly 4.5% of local 2W registration sales recorded on the VAHAN site in Fiscal 2023 to 41–56% of the local 2W sales volume. By concentrating solely on electric vehicles, it can take advantage of this shift in the expanding 2W market in India.

• Founder-led business assisted by a team of highly qualified and experienced leaders.

• Internal R&D and technological resources.

• Design and development methodology based on scalable platforms.

• Omnichannel Direct-to-Customer Distribution Model.

• Government incentives related to electric vehicles can result in cost savings.

 

IPO’s Weaknesses

• Its operational experience is limited, and they have experienced losses as well as negative cash flows.

• Its expected manufacturing and delivery timetables may be impacted by faults, quality concerns, supply disruptions, or price increases for the components utilized in its electric vehicles. These events would raise the cost of materials and the electric vehicle itself.

• Its brand, reputation, and capacity to create, market, and sell electric vehicles could all suffer if our vehicles have flaws, perform below industry standards, or fall short of the performance levels we've promised. They might also have to deal with product recalls or other similar corrective measures, as well as face legal action.

• Several potential hazards could impede its internal cell production capacity at the Ola Gigafactory.

• The supply and demand for their electric cars may be more unpredictable than they can predict, which could result in an excess or shortage of inventory. This could then make it difficult for them to effectively manage their manufacturing needs, which could lead to extra expenses and production delays. Its potential to take advantage of economies of scale may be limited by the low demand for its cars and the poor usage of capacity of its Ola Futurefactory.

 

Ola IPO GMP Today

The Latest GMP of Ola IPO is Rs.3.

 

 

Ola Electric Mobility Limited IPO timetable (Tentative)

The IPO is scheduled from August 2 to August 6, 2024, with allotment on August 7, 2024,  refund initiation on August 8, 2024, and listing on August 9, 2024.

Events	Date
IPO Opening Date	August 2, 2024
IPO Closing Date	August 6, 2024
IPO Allotment Date	August 7, 2024
Refund initiation	August 8, 2024
IPO Listing Date	August 9, 2024

 

Ola Electric Mobility Limited IPO Details 

The IPO with a face value of Rs.10 per share is set to start on August 2, 2024, close on August 6, 2024, and offer a total issue size of 808,626,207 Shares (aggregating up to Rs.6,145.56 crores).

IPO Opening & Closing Date	August 2, 2024 to August 6, 2024
Face Value	Rs.10 per share
Issue Size	808,626,207 Shares (aggregating up to Rs.6,145.56 crores).
Offer for Sale	84,941,997 Shares (aggregating up to Rs.645.56 crores).
Fresh Issue	723,684,210 Shares (aggregating up to Rs.5,500 crores).
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Ola Electric Mobility Limited IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1ot (195 shares) amounting to Rs.14820,  and 13 Lots (2535 Shares) amounting to Rs.192,660 respectively, while for HNI investors, the minimum lot is 14 (2730 shares) amounting to Rs.207,480.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	13 lot
S-HNI (Min)	14 lots
S-HNI (Max)	67 Lots
B-HNI (Min)	68 Lots

 

Ola Electric Mobility Limited IPO Reservation

QIB Share Portion	75%
Retail Investors Share Portion	10%
NII Shares Portion	15%

 

Promoters and Management of Ola Electric IPO

•  Bhavish Aggarwal.
  
  

Pre-issue Promoter shareholding	85.77%
Post-issue Promoter shareholding	-

 

Ola Electric IPO Lead Managers

• Kotak Mahindra Capital Company Limited

• Bofa Securities India Limited

• Axis Capital Limited

• SBI Capital Markets Limited 

• Citigroup Global Markets India Private Limited

• Goldman Sachs (India) Securities Private Limited

• ICICI Securities Limited 

• Bob Capital Markets Limited 

 

 

Dividend Policy

The company has not declared a dividend in the last three financial years. 

Conclusion

The company has experienced negative cash flow in operating activities and investing activities throughout the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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