Ola Elec on road to IPO, touts cell tech

capacity of the Ola Gigafactory to 5 GWh by October 2024”, it added.

“We aim to develop new cell form factors which are capable of storing five times the energy of conventional cell form factors and use advanced technologies such as advanced electrode manufacturing technologies”, the company had said, in an apparent reference to the 4680 form factor that it is pitching to investors now.

Recently, Reuters reported that Ola Electric was looking to bid for lithium blocks being auctioned by the government, aiming to secure a key raw material for batteries.

“Original equipment manufacturers (OEMs) having presence across the value chain of electrification from localization to charging infrastructure will enjoy the advantage of economies of scale, provided they are able to scale their output, thereby delivering cost efficiencies. This will help India emerge as a large manufacturing base for electric two-wheelers,” said Hemal Thakkar, senior practice leader and director at Crisil.

On 13 March, the Centre unveiled the ₹500 crore Electric Mobility Promotion Scheme (EMPS) 2024 to encourage the purchase of electric two- and three-wheelers, a measure expected to support companies including Ola Electric. However, despite EMPS extending subsidy benefits for four months, the quantum of subsidy per vehicle has been lowered, noted Rohan Kanwar

Gupta, vice president, ICRA. “Accordingly, a reduction in the subsidy benefit is a short-term impediment and will impact demand/realizations to an extent. Notwithstanding the same, OEMs will continue to strive to offer competitive products by leveraging their cost structure through localization of key components and value engineering capabilities. In addition, softening in battery cells prices (which accounts for almost 40% of vehicle cost) will also help them offset the impact of lower subsidies to some extent,” Gupta added.

“While the industry is likely to witness an exponential rise in volumes over the medium term, the road to profitability for the industry remains long; thus, a timely fund-raising to support the capital structure/ competitiveness of start-up players would be key. The same assumes even greater importance, given the ever-increasing competitiveness in the EV segment, with incumbent OEMs also ramping up their presence in the segment,” Gupta of ICRA added.

Founder Aggarwal plans to sell up to 47.4 million shares in the Ola Electric IPO, while the company will look to raise ₹5,500 crore by selling new shares. Ola Electric was said to seek a valuation of at least $10 billion when it floated its IPO plans in the first half of 2023.

However, the company was valued at $5.4 billion, when it raised $385 million in October. According to people aware of these discussions, the company may fetch a valuation of around $6 billion in the IPO.

According to people aware of these discussions, the company may fetch a valuation of around $6 bn in the IPO