Ola Electric to use Rs 1,226 cr IPO proceeds on capex
These will be funded from internal accruals and long term borrowings availed by OCT, it said.
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NEW DELHI: IPO-bound Ola Electric Mobility Ltd plans to utilise Rs 1,226.43 crore out of the proceeds of its Rs 5,500-crore public issue on capacity expansion of its cell manufacturing plant to 6.4 GWh from5 GWh, according to preliminary papers filed by the company with capital markets regulator Sebi.
The company, which had filed the draft red herring prospectus (DRHP) last week is also looking to use Rs 1,600 crore from the public fund raising on research and product development, while another Rs 800 crore will be deployed to repay debt.
Ola Electric Mobility (OEM) which had on August 15, 2023 announced a line-up of electric motorcycles - Cruiser, Adventure, Roadster and Diamondhead - expects to begin delivery of the motorcycles in the first half of fiscal 2026.
In its DRHP, the company said the Phase 1 (a) and Phase 1 (b) of the set up and expansion of the Ola Gigafactory at Krishnagiri district in TN will be funded from internal accruals and long term borrowings availed by its arm Ola Cell Technologies (OCT).
The Phase 1 (a) is expected to be completed by March 2024 and the gigafactory will have a capacity of 1.4 GWh. In the Phase 1 (b), the capacity will be increased to 5 GWh by October 2024. These will be funded from internal accruals and long term borrowings availed by OCT, it said.
The Phase 2 of the expansion envisions scaling up the capacity to 6.4 GWh by April 2025 and take it up to 20 GWh by the second quarter of calendar year 2026.
The company also said a portion of the proceeds will be used for capex to be incurred by OCT for expansion of the capacity of cell manufacturing plant from 5 GWh to 6.4 GWh. “A portion of the net proceeds from the fresh issue aggregating to Rs 1,226.43 crore shall be utilised for funding the project,” it said, adding, the boards of OCT and the company pursuant to their resolutions each dated December 22, 2023 respectively, have consented and taken note of the allocation. On future product launch plans, the company said, “We plan to further launch affordable mass market Ola S1 models, including E2Ws (electric two-wheelers) targeted at the personal, business to business and last-mile delivery segment by first half of Fiscal 2025.”
It further said, “We also plan to commence delivery of our motorcycles, which we announced on August 15, 2023, by the first half of fiscal 2026. We plan to further expand our product portfolio to also cover mass market motorcycles to capture a broader base of consumers across different product types and price points in the long run.”