Ola Electric Mobility, India’s largest electric scooter maker, is facing investor pushback on its targeted valuation for its upcoming IPO (initial public offering), people familiar with the matter told Bloomberg.
Expectations vs reality
The company’s founder has been aiming for a potential valuation of as much as $7 billion ( ₹58,494 crore) in a Mumbai listing, the people said, asking not to be identified as the information isn’t public.
That would compare with a valuation of about $5 billion ( ₹41,781 crore) based on initial feedback from investors, the people said.
At this rate, Ola Electric’s current investors may opt not to sell existing shares in the company, the people told Bloomberg. Considerations are ongoing and no final decisions have been made, the people added.
A representative for Bengaluru-based Ola Electric didn’t immediately respond to a request by Bloomberg for comments.
Also Read | Ola Electric gets Sebi approval for ₹5,500 crore IPO
The background
Backed by SoftBank Group Corp. and Tiger Global Management, Ola Electric is looking to raise ₹5,500 crore by selling new shares in the IPO, according to its prospectus. India’s market regulator approved the company’s IPO plans on Thursday.
The scooter maker’s IPO comes as India continues to be a bright spot for equity capital markets in Asia, according to the Bloomberg report.
Bankers expect more to come as potential uncertainty regarding the country’s elections has now passed and expectations for economic growth remain strong, according to Bloomberg.
Also Read | Ola Electric layoffs: Company to cut 500 jobs, Bhavish Aggarwal ‘reducing costs’
The goals
The IPO is part of the company’s ambitious plans to expand into battery-powered cars and EV cells. Founder Bhavish Aggarwal is building what he’s touting as the world’s largest electric vehicle hub in southern India for producing battery-powered two-wheelers, cars and lithium-ion cells. The startup has also launched electric motorcycles, the report read.
Ola Electric is planning to use part of the proceeds to help expand the manufacturing capacity of its electric vehicle cell factory to 6.4 gigawatt hours from 5 gigawatt hours, according to the report.
Kotak Mahindra Capital Co., Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc. are among banks working on the share sale, according to the prospectus.
Also Read | NSE Indices launches India’s first electric vehicle index: All you need to know
