22nd June 2024- Ola Electric Mobility Ltd, India’s leading electric scooter manufacturer, is encountering resistance from investors over its targeted valuation for its upcoming initial public offering (IPO). Sources familiar with the matter revealed that the company’s founder has set sights on a potential valuation of up to $7 billion for its listing in Mumbai. However, initial feedback from investors suggests a valuation closer to $5 billion, prompting discussions among stakeholders.
At the $5 billion valuation, existing investors in Ola Electric may decide against selling their shares in the IPO, indicating ongoing deliberations without final decisions. The company, backed by SoftBank Group Corp and Tiger Global Management, plans to raise ₹55 billion ($659 million) through the issuance of new shares, as approved by India’s market regulator.
The IPO is a crucial step in Ola Electric’s strategy to expand into battery-powered cars and EV cells, bolstered by plans to enhance manufacturing capabilities at its electric vehicle cell factory. Bhavish Aggarwal, the founder, aims to establish the world’s largest electric vehicle hub in southern India, emphasizing the production of battery-powered two-wheelers, cars, and lithium-ion cells.
Bankers including Kotak Mahindra Capital Co, Citigroup Inc, Bank of America Corp, and Goldman Sachs Group Inc are involved in managing the share sale, as per the company’s prospectus.
Conclusion
Ola Electric’s IPO reflects its ambitious growth plans amidst India’s favorable equity markets. The outcome of valuation negotiations will significantly impact investor participation and the company’s future expansion initiatives.
Source: Link
