Ola Electric IPO: Bhavish Aggarwal eyes ₹10,000 crore fortune; Vijay Shekhar Sharma, Zoya and Farhan Akhtar likely to gain 26%

Ola Electric Mobility Ltd's initial public offering (IPO) is one of the most eagerly awaited of the year. The mainboard IPO is scheduled to open for subscription on August 2.

The electric vehicle maker’s plans to raise ₹6,145.56 crore from the IPO consist of a combination of a fresh issue of 72.37 crore shares aggregating ₹5,500 crore and an offer for sale (OFS) of 8.49 crore shares aggregating ₹645.56 crore. The price band for the Ola Electric IPO has been fixed at ₹72 to ₹76 per share.

The promoters, promoter group, and several investors will participate in the OFS. The company's founder and promoter, Bhavish Aggarwal, is all set to offload up to 4,73,94,014 shares via the OFS route. At the upper limit of the price band, Aggarwal’s stake sale could be valued at ₹360.19 crore.

Aggarwal holds 1.36 billion shares of Ola Electric, or a 36.94% stake, in the company. This translates to ₹10,350 crore at the upper limit of the IPO price band.

According to reports, Aggarwal acquired his stake for a negligible amount. However, the price at which he bought the stake in the company is not known.

Vijay Shekhar Sharma and Farhan, Zoya Akhtar likely to make 26% gains on investment

Actor Farhan Akhtar, his sister and filmmaker Zoya Akhtar, and Paytm founder Vijay Shekhar Sharma are also among Ola Electric Mobility’s existing investors. According to reports, they acquired a stake in the electric two-wheeler company on December 21, 2021.

The brother-sister duo and the Paytm founder will not participate in the OFS.

A Moneycontrol report said the three investors’ acquisition cost of Ola Electric’s shares amounts to ₹60.36 apiece after a bonus issue and conversion of preference shares ahead of the IPO. At the upper price band of the IPO, at ₹76 per share, the three investors are expected to gain 26% compared to their investments.

The Paytm founder acquired shares of the EV manufacturer via his investment vehicle, VSS Investco Private Limited. According to reports, Sharma acquired seven Series C preference shares for a total sum of ₹7.5 crore. Sharma’s stake is currently valued at ₹9.46 crore at the upper end of the price band.

On the other hand, Zoya Akhtar acquired a single Series C preference share for ₹1.07 crore in 2021, and Farhan bought two preference shares for ₹2.14 crore. Ritesh Sidhwani, the co-founder of film production house Excel Entertainment, also acquired two preference shares in Ola Electric’s Series C round.

After the conversion of the preference shares, Zoya Akhtar holds 1.78 lakh shares of Ola Electric, Vijay Shekhar Sharma holds 12.45 lakh shares, Farhan Akhtar holds 3.56 lakh shares, and Ritesh Sidhwani holds 3.56 lakh shares.

A few investors to make losses

Some pre-IPO investors, such as Alpine Opportunity Fund VI LP and Tekne Private Ventures XV Ltd, are likely to incur losses as Ola Electric IPO’s price band has been set lower than their average acquisition price.

Alpine Opportunity Fund VI LP acquired shares at an average price of ₹111.51 apiece, and Tekne Private Ventures XV Ltd bought the shares for ₹113.12 apiece. Based on the upper limit of the IPO's price band, these investors are likely to incur more than a 30% loss in the OFS.

The mainboard public issue will remain open for subscription from August 2 to August 6. Ola Electric Mobility IPO listing date has been tentatively fixed as August 7.