Ola Electric Mobility Limited is a pure EV player in India engaged in building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. It manufactures EVs and certain core EV components like battery packs, motors, and vehicle frames at the Ola Future Factory.
Its business focuses on capturing the opportunity arising from the electrification of mobility in India. It seeks opportunities to export its EVs in select international markets. The company has delivered seven products and announced four new products since its first product announcement in August 2021.
The company operates its direct-to-customer (D2C) omnichannel distribution network across India, comprising 870 experience centres and 431 service centres as of March 31, 2024.
Source: RHP
According to the Redseer Report, Ola Electric Mobility Limited had the highest revenue of all Indian-incorporated electric 2Ws (E2Ws) original equipment manufacturers (OEMs) from E2W sales in Fiscal 2023.
Within nine months of delivering its first EV scooter in December 2021, it became the best-selling E2W brand in India in terms of monthly E2W registrations on the VAHAN Portal of the Ministry of Road Transport and Highways (VAHAN).
The Ola FutureFactory is India's largest integrated and automated E2W manufacturing plant, in terms of production capacity, by an E2W-only OEM as of March 31, 2024. The company's business model hinges on three key pillars:
The company's business model across the three key pillars enables it to improve EVs' performance, resulting in a better customer experience, business growth, and cost control. It also enables the company to continuously focus on and invest in R&D and technology, giving rise to flywheel effects.
Source: RHP
The table captures some of the key financials of the company:
Particulars | FY24 | FY23 | FY22 |
---|---|---|---|
Total assets (in ₹ crores) | 7735.409 | 5573.169 | 5395.863 |
Total liabilities (in ₹ crores) | 5716.070 | 3216.725 | 1734.411 |
Total income (in ₹ crores) | 5243.270 | 2782.697 | 456.260 |
Diluted earnings per share | (4.35) | (3.91) | (2.23) |
Losses for the year (in ₹ crores) | (1584.40) | (1472.079) | (784.150) |
Return on net worth (in %) | (78.46) | (62.47) | (21.42) |
EBITDA (in ₹ crores) | (1040.191) | (1197.098) | (717.552) |
Source: RHP
The Ola IPO opens on 2nd August and closes on 6th August. The table captures the key IPO details:
Fresh issue of equity shares aggregates up to | ₹5,500 crores |
---|---|
Number of shares available in offer for sale | 84,941,997 |
Price Band | ₹72 to ₹76 per equity share |
Bid Lot | 195 equity shares and in multiples thereof |
Face value | ₹10 |
Source: RHP
The company plans to utilise the IPO proceeds for funding:
Source: RHP
India is the second-largest 2W market globally and the third-largest in the 4W market in terms of domestic sales. The total addressable market for 2W exports from India is between ₹ 7.20 trillion to ₹ 8 trillion. The trend towards electrification of mobility is driven by the increasing affordability of EVs attributable to lower battery prices, improved EV driving ranges, and regulatory support.
In FY 2024, after a review of phase II of FAME subsidies, the Ministry of Heavy Industries (MHI) introduced the Electric Mobility Promotion Scheme 2024 (applicable from April 1, 2024) to accelerate the adoption of E2Ws and E3Ws and to further the development of the EV infrastructure in India.
Ola Electric Mobility believes it's well positioned to address this large market opportunity in EVs through its vertically integrated approach, focus on technology, R&D, execution ability, and eligibility for certain government incentives.
Source: RHP
Some of the risks and challenges for Ola Electric Mobility Limited are:
Source: RHP
Go through the company’s red herring prospectus to understand the company and its various aspects fully. Also, evaluate your financial goals and risk tolerance before subscribing.
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