Ola Electric hires Goldman, Kotak for IPO in early 2024

Ola Electric, India’s top electric two-wheeler maker, has appointed Goldman Sachs and Kotak Mahindra Capital to manage a potential initial public offering (IPO) early next year, two people aware of the matter said.

Other investment banks including Axis Capital, Citi, ICICI Securities and JP Morgan are also keen on the IPO mandate, the people said on condition of anonymity.

The Bengaluru-based company is expecting a valuation of at least $10 billion, one of the people cited above said, even though banks are still working on a price discovery.

The planning of the public offering is still at an early stage, the person added.

The Bengaluru-based company plans to file its draft prospectus with the market regulator Securities Exchange Board of India (Sebi) at the beginning of the next quarter, with the aim to list its shares on the exchanges in either January or February, the person added.

A spokesperson for Ola Electric declined to comment.

“The IPO is still some time away as it will depend on when the IPO sentiment will improve. It will primarily be a primary fund infusion as the company needs capital,” the second person cited above said.

In parallel, Ola Electric is in the process of raising capital from several funds in the Middle East.

“The round was oversubscribed and there was significant interest from Middle Eastern sovereign funds. The paperwork is expected to be completed soon,” a third person aware of the matter said.

Ola Electric last raised around $200 million from Tekne Private Ventures, Alpine Opportunity Fund and Edelweiss at a valuation of $5 billion in January 2022. It is now close to finalizing a $300 million round at a valuation of nearly $6 billion.

The company, led by founder and CEO Bhavish Agarwal, has been looking to appoint IPO bankers since March, the person said. However, Ola Electric was probably working on the fundraise even earlier, the person said.

India’s electric vehicle market is at a nascent stage, with many new and legacy original equipment manufacturers (OEMs) seeking to raise capital for expansion. Ola Electric, with its Ola S1 and S1 Pro scooters, currently leads the domestic electric two-wheeler market, accounting for nearly a third of all e-scooters sold in India in April, according to the government’s VAHAN dashboard. It is now slated to launch its cheapest e-scooter offering, the Ola S1 Air with deliveries slated to begin in July.

Ola Electric presented an electric car in August last year, although the timeline for a potential launch, originally slated for 2024, are likely to be prolonged. It has also showcased designs for an e-motorcycle. In February 2023, British International Investment (BII) said it had invested ₹1,925 crore ($250 million) in Mahindra and Mahindra’s four-wheeler EV business. M&M is raising more capital for its EV business, Mint reported in March.

alisha.sachdev@livemint.com