Ola Electric IPO pricing to be lower than private valuation: Report

Ola Electric is expected to launch its initial public offering (IPO) in the next few weeks at a valuation of around $4 billion, which is lower than the earlier estimation of $5.5 billion.

The Economic Times, citing sources, said the final IPO pricing will be determined after CEO Bhavish Aggarwal discusses it with bankers and investors. According to a source, the founder has agreed to a 25-27% discount on its last-round pricing.

The company filed its draft red herring prospectus with SEBI in December 2023. It plans to raise Rs 5,500 crore through a combination of a fresh issue of shares and an offer for sale.

Initially, the EV maker aimed for a $6-7 billion valuation but has since reduced its target. The report also notes that such valuation figures were not mentioned in the lead-up to the IPO.

SoftBank-backed Ola Electric’s IPO is set to be the first by an EV maker in the country. In April, it secured $50 million from debt financing platform, EvolutionX Debt Capital.

It competes with Ather Energy, which is also preparing for an IPO, and converted into a public company in June.

Ola Electric is the subsidiary of India-based ride-hailing platform Ola, which focuses on building EV scooters. At present, it is the largest electric two-wheeler manufacturer in India.

In February this year, mutual fund issuer Vanguard, slashed the valuation of Ola to $1.88 billion, lower than its latest fair value of $2.56 billion as of August 31.

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)