Ola Electric’s Funding Strategy
Ola Electric has announced a new initiative to gather up to Rs 1,000 crore through a rights issue of partially paid equity shares. The board gave the green light for this plan on September 28, pending necessary regulatory and statutory approvals. The rights issue will be available to eligible shareholders identified as of a record date that will be revealed later.
Details of the Fundraising
The exact issue price, rights entitlement ratio, record date, issuance timeline, and payment terms have yet to be determined by the board. This latest fundraising effort follows less than a month after Ola Electric started preparations to raise up to Rs 1,500 crore via equity shares or convertible securities. This earlier fundraising initiative could utilise various methods including a further public offer, rights issue, QIP, private placement, or other options that require shareholder and regulatory consent.
Previous Fundraising Efforts
In June, Ola Electric successfully raised Rs 780 crore via a QIP, offering approximately 21.76 crore shares at Rs 35.86 each to qualified institutional buyers.
Management Changes and Market Challenges
Meanwhile, Ola Electric’s Chief Operating Officer, Hyun Shik Park, stepped down from his role effective September 5, citing personal reasons. This new round of fundraising arrives at a time when the electric two-wheeler manufacturer is experiencing challenges related to market share, customer complaints, and stock performance. In Q1 FY27, the revenue from operations declined by 45% compared to the previous year, amounting to Rs 455 crore, while net losses decreased to Rs 336 crore from Rs 428 crore the prior year. In July, the company registered 13,170 vehicles, representing a 6.8% market share.
Expansion of Manufacturing Operations
Ola Electric is also enhancing its battery cell production capabilities. Recently, the company secured Rs 95.81 crore through the government’s PLI Auto scheme for FY27. Additionally, the board has approved plans to raise Ola Electric’s authorised share capital from Rs 8,318.5 crore to Rs 8,721.9 crore, pending shareholder approval.