IPO-bound Ola Electric slashes valuation to $4 billion
₹72-76 per share, valuing the company at $4 billion ( ₹33,522 crore) at the upper end, a sharp discount to the $5.4 billion valuation it commanded in its last private funding round in September. The Bhavish Aggarwal-led company is looking to raise ₹6,146 crore by selling investors an ecosystem-led electric vehicle (EV) growth story, with investments in making cells and components. Of this, ₹5,500 crore will be raised through the issue of fresh equity while about ₹646 crore will be through an offer for sale by existing shareholders.
The company is the market leader in the electric two-wheeler segment in India, commanding a 35% market share in FY24 with the sale of just under 330,000 units. Its revenues in FY24 surged 90% over the previous year to ₹5,010 crore. However, the surge in revenue was accompanied by an increase in losses, which grew 8% year-on-year to ₹1,584 crore in FY24.
Aggarwal claims that an increase in sales will help the company achieve better efficiencies of scale, narrowing its losses. The company’s loss margins have already narrowed from -43% in FY23 to -20% in FY24. Experts found Ola Electric’s ₹33,522-crore valuation reasonable after projecting the number of vehicles the company could sell over the next five years and the overall electrification of the automotive market.
“It is fairly priced. But that also means there is not much upside," said an analyst tracking the automotive industry. He declined to be named.
When questioned about the dip in valuation, Aggarwal, the company’s founder and chair, painted it as an altruistic decision. “Our philosophy for this company has been very focused on the long term. And that's why when we decided the price, our whole focus was to make sure we are leaving enough
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