About
Incorporated in 2017, Ola Electric is a Bengaluru-based electric two-wheeler manufacturer. It was a wholly-owned subsidiary of ANI Technologies, the parent entity of Ola Cabs previously. In 2018-19, Ola Electric was spun off as a separate entity. The company is a pure EV player in India and is building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. The company manufactures EVs and certain core EV components like battery packs, motors, and vehicle frames at the Ola Futurefactory. It undertakes R&D activities in India, the United Kingdom (UK) and the United States (US).
Ola Electric’s manufacturing facility at Krishnagiri, Tamil Nadu is India’s largest two-wheeler EV manufacturing factory. The company operates a direct-to-customer (D2C) omnichannel distribution network comprising 935 experience centers and 414 service centers (of which 410 service centers are located within experience centers) across India. Its current product portfolio includes an e-scooter named Ola S1 in four variants – Ola S1 Air, Ola S1X, Ola S1, and S1 Pro. The company will compete against legacy auto manufacturers like Heromotocorp, Bajaj Auto, and TVS Motors and also against new startups like Ather Energy, and Hero Electric.
According to the Redseer Report:
- Ola 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, Ola 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.
Financials
Issue size
| Funds Raised in the IPO | Amount |
| Overall | To be announced |
| Fresh Issue | ₹5,500 crores |
| Offer for sale | To be announced |
*All figures except EPS are in ₹ Crores
Risks
- Relying on government incentives: Any reduction or removal of government incentives, such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy, benefits from schemes like the Production Linked Incentive (PLI) for the Automobile and Auto Component Industry, including the PLI Scheme for National Programme on Advanced Chemistry Cell Battery Storage, subsidies from the government of Tamil Nadu, and GST concessions for EV customers, could escalate the purchase cost. This scenario might potentially dampen customer demand for the company’s EVs.
- Anticipating supply and demand: The company might struggle to accurately forecast the supply and demand for its electric vehicles, leading to either shortages or excess inventory. This uncertainty could hinder the effective management of manufacturing requirements, resulting in additional costs and production delays. Subdued demand for Ola’s EVs and underutilization of Ola Futurefactory’s capacity may impede the company’s ability to capitalize on economies of scale.
- Intense competition: The company could face challenges in competing effectively in the fiercely competitive and rapidly evolving automotive market. Advancements in alternative technologies for internal combustion engine (ICE) vehicles, such as advanced diesel, hydrogen, ethanol, fuel cells, or compressed natural gas, as well as improvements in fuel economy or other ICE features, could significantly and negatively impact the business and its prospects.