Ola Electric’s IPO: charging ahead or running on empty?

livemint.com:

₹6,146 crore at the upper end of its ₹72-76 price band. That would take its valuation to about ₹33,522 crore, or about $4 billion. Ola Electric, India’s largest maker of electric scooters, has demonstrated impressive growth in recent years.

As per its IPO documents, its scooter sales volumes jumped 2.1 times to reach 330,000 units in the financial year 2023-24, building on the previous year’s jump of nearly eight times. This rapid expansion was reflected in the company’s revenue, which almost doubled to ₹5,009.8 crore in 2023-24, following up on a 605% growth in the preceding year. Also read | Ola Electric’s IPO: For Bhavish Aggarwal, top employees and a couple of Bollywood celebrities more riches in store While Ola Electric is yet to become profitable, it managed to narrow its operating loss to ₹1,040.2 crore in 2023-24 from ₹1,197.1 crore in the year before.

“Ola Electric’s vertically integrated business model is strategically designed to optimise cost structure and supply chain efficiency," said Sonam Srivastava, founder and fund manager at Wright Research. Moreover, the company has been a significant beneficiary of the government’s production-linked incentive schemes for automobiles and cell manufacturing. But Ola Electric’s revenue engine in 2023-24 was remarkably concentrated, with just two e-scooters—the Ola S1 Pro Gen 1 and Gen 2—contributing 59.7% to overall operational revenue, signalling a potential vulnerability.