Ola Electric IPO: Bhavish Aggarwal-led company raises Rs 2,763 crore from QIPs
Mumbai: Ola Electric, India's largest electric two-wheeler manufacturer, allocated 364 million shares to anchor investors, raising Rs 2,763 crore, media reports said.
The shares were priced at Rs 76 each, the upper limit of its price band. The Rs 6,146 crore IPO, the largest since the Rs 21,000 crore IPO of LIC in May 2022, opens for subscription on Friday and closes on Tuesday.
The anchor allotment attracted over 80 domestic and foreign funds, with Rs 1,117 crore going to domestic mutual funds such as SBI MF, HDFC MF, Nippon MF, and UTI MF. Foreign funds receiving allotments include Templeton Global, Nomura, Amundi, Jupiter Global, and Goldman Sachs, reported Business Standard.
Investment bankers reported that demand for shares in the anchor book exceeded availability.
Anchor allotments, made the day before an IPO opens, provide guidance to other potential investors.
About 60 percent of the shares reserved for institutional investors in the IPO can be allocated through the anchor book.
Backed by Softbank, Ola has set its IPO price band at Rs 72-76 per share. At the upper end, the company will be valued at Rs 33,522 crore ($4 billion) on a post-dilution basis, according to the report.
The IPO includes a fresh issue of shares worth Rs 5,500 crore, intended for debt repayment, expansion of its gigafactory, and research and development.
The Offer for Sale (OFS) portion amounts to Rs 646 crore, with founder Bhavish Aggarwal selling shares worth Rs 288 crore, according to the report.
Other investors, including Tiger Global (Rs 48 crore) and Softbank (Rs 181 crore), are also selling stakes. Alpine Opportunity and Tekne Private are selling smaller quantities at a loss, as their acquisition cost exceeds Rs 111 per share.
Post-IPO, promoter shareholding in Ola will decrease from nearly 45 percent to 36.78 percent, the report said.
The company reported a net loss for FY24 and has been operating at a loss.
Despite the cash burn, Ola improved its free cash flow loss margin to -31 percent in FY24. However, this financial strain has shifted the company from a net cash-positive position in FY22 to net debt in FY24.
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