Market News
4 min read | Updated on August 01, 2024, 07:51 IST
SUMMARY
The company’s founder and promoter, Bhavish Aggarwal, owns 136 crore equity shares, or 36.94% of the company. Aggarwal’s stake is currently valued between ₹9,919 crore and ₹10,350 crore as per the IPO price band.
Ola Electric IPO opens on August 2: Bhavish Aggarwal, top executives and early investors likely to earn big from public issue
Ola Electric Mobility’s IPO is scheduled to open for subscription on Friday, August 2. The much-awaited public issue is likely to add to the wealth of many of the company’s top executives and early investors. The company has fixed the price band for the mainboard issue at ₹72-76 per share.
Ola Electric’s total market value is estimated to be nearly ₹33,500 crore ($4 billion) at the upper end of the price band. The company’s current valuation is lower than the $5.4 billion valuation in the last private funding round held in September 2023.
The company’s founder and promoter, Bhavish Aggarwal, owns 1,36,18,75,240 equity shares, or 36.94% stake, in the company. Aggarwal’s stake is currently valued between ₹9,919 crore and ₹10,350 crore as per the IPO price band.
The IPO is valued at ₹6,145.56 crore and the book-building offer comprises a fresh issue of 72.37 crore shares aggregating to ₹5,500 crore and an offer-for-sale (OFS) of 8.49 crore shares aggregating to ₹645.56 crore.
The company's founder, Bhavish Aggarwal, will be offloading 20% fewer shares than he had planned to sell, as per the RHP. According to the RHP, Aggarwal is slated to sell 3,79,12,211 equity shares of the company via OFS. At the lower price band, the share sale amounts to nearly ₹273 crore, and at the upper price band, the stake sale aggregates to over ₹288 crore.
Since Aggarwal’s cost of acquiring the shares is negligible, the founder is likely to profit from the entire amount from the share sale.
The electric two-wheeler manufacturer has secured investment from various investors in the past. The SoftBank Group, Tiger Global Management, Matrix Partners India, and celebrity brother-sister duo Zoya and Farhan Akhtar are among the company’s early investors.
In December 2021, Zoya Akhtar acquired 1,94,998 Compulsory Convertible Preference Shares (CCPS) of the company in its Series C funding round for ₹1.07 crore. Post conversion of the preferential shares, she holds 1,77,841 equity shares, which are expected to be worth at least ₹1.3 crore as per the lower limit of the issue price. She is likely to gain at least ₹22 lakh over her investment post IPO.
Actor Farhan Akhtar also acquired 3,89,996 CCPS for ₹2.14 crore in the Series C funding round held in 2021. Post conversion, the actor holds 3,55,683 equity shares which are estimated to be worth ₹2.5 crore. Post IPO, he is expected to earn at least a profit of ₹36 lakh on his initial investment.
Ola Electric’s top 10 executives who own shares of the company could jointly hold stock worth ₹10,260 crore, based on the lower end of the IPO’s price band. These employees were allotted stock options under an Employee Stock Ownership Plan (ESOP).
Suvonil Chatterjee, the company’s chief technology and product officer, holds shares of the two-wheeler maker worth about ₹150.7 crore. Among the other top executives who own shares of the company, Harish Abichandani, the Chief Financial Officer and N. Balachandar, the company’s Chief People Officer, jointly hold shares worth nearly ₹53 crore.
Jitesh Shah, who the company hired to oversee its after-sales charging operations, was also allotted shares of the company. Shah currently owns shares worth nearly ₹7.2 crore.
Additionally, former executives who were allotted shares will also gain from the issue as Arun GR (former group CFO) and Slokarth Dash (former head of planning and strategy) jointly hold shares of the company worth at least nearly ₹47 crore.
The initial public offer of Ola Electric Mobility will open for subscription on August 2 and close on August 6. Shares of the company will be listed on both the NSE and BSE, with the tentative listing date fixed as August 9.
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