OLA Surging Ahead Pre-IPO: Nuvama Report OLA Electric is the new addition to the list of new IPOs from India and more recently, the Securities and Exchange Board of India (SEBI) gave its nod for the EV maker to go public.
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OLA Electric is the new addition to the list of new IPOs from India and more recently, the Securities and Exchange Board of India (SEBI) gave its nod for the EV maker to go public.
Last December, OLA Electric submitted a draft red herring prospectus (DRHP) to SEBI in order to facilitate raising INR5500 Crores through a fresh equity offering. The company also hinted at selling 95.12 million equity shares worth INR 10 face value through an offer for sale (OFS).
The founder and CEO, Bhavish Aggarwal is reported to sell 47.3 million in sales.
As reported by Mint, Nuvama Institutional Equities, a Domestic Brokerage Firm met with Bhavish before the IPO and the reveal of pricing band details and key dates. Nuvama was also reported to have had a tour of the company's E-2W/cell production facility.
The brokerage firm said after the conversation with the OLA management that Electric Vehicle (EV) adoption in 2Ws is anticipated to soar over the medium term due to its better cost economics and greater model possibilities.
Further, OLA is said to have scheduled future motorcycle unveils after FY26 in categories such as Adventure, Diamond Head, Roadster, and Cruiser categories. OLA's management said the third-gen platform will be introduced the following year, from which they hope to achieve a 15% cost reduction. The firm also has a vision to build a 20 GWh cell manufacturing capacity for internal usage as well as export energy to other sectors.
Insights from Nuvama's visit further strengthened the EV maker's claim as one of the dominators in the category. According to Tracxn, OLA leads the segment in terms of funding, having received over USD 1 Billion in equity funding and boasts a market share of over 50%. Nuvema reports that the EV maker has the capacity to assemble over 1 million vehicles, vertically combining different component assemblies.
OLA also uses an 'omni-channel' D2C distribution network made up of more than 400 service centers and over 900 experience centers.
Nuvama's report said, "The speed at which OLA has set up its manufacturing facility is commendable. It has developed new products since August 2021, launched five products, and unveiled four motorcycle variants. We expect EV penetration to continue and grow from 5% in FY24 to 20% in FY30, implying a 30% CAGR."
According to the report, OLA has also established a 1.4GWh manufacturing capacity for 4680 cells (NMC chemistry). It revealed that the 21x70mm cell is most likely to be replaced by the 4680 cell, a 46x80mm cylindrical cell. OLA is said to be integrating 4680 cells currently and by the end of FY25, the cells are said to be modified for use in current models.
