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19 Nov 2024
Ola Electric Mobility is encountering resistance from investors over its proposed valuation for its upcoming IPO. Sources familiar with the situation indicate that the company's founder is targeting a valuation of up to $7 billion for the Mumbai listing.
However, initial investor feedback suggests a valuation closer to $5 billion. These sources requested anonymity as the information is not public.
Ola Electric, India's leading electric scooter manufacturer, is experiencing pushback on its valuation goals for the IPO.
The company's founder aims for a potential $7 billion valuation, but initial feedback from investors suggests it might be around $5 billion instead.
If the valuation is set at $5 billion, current investors might choose not to sell their shares. Discussions are ongoing, and no final decisions have been made.
A representative for Ola Electric, which is backed by SoftBank Group Corp. and Tiger Global Management, did not immediately comment. According to its prospectus, Ola Electric aims to raise 55 billion rupees ($659 million) by issuing new shares. India’s market regulator recently approved the company’s IPO plans.
Despite these valuation challenges, India remains a bright spot for equity capital markets in Asia, with strong expectations for economic growth following the elections.
Ola Electric’s IPO is part of its ambitious expansion plans into battery-powered cars and EV cells. Founder Bhavish Aggarwal is building what he claims will be the world's largest electric vehicle hub in southern India, producing battery-powered two-wheelers, cars, and lithium-ion cells.
The company has also introduced electric motorcycles.
Part of the IPO proceeds will be used to expand the manufacturing capacity of Ola Electric's EV cell factory from 5 gigawatt hours to 6.4 gigawatt hours. Banks working on the share sale include Kotak Mahindra Capital Co., Citigroup Inc., Bank of America Corp., and Goldman Sachs Group Inc., according to the prospectus.
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