Ola Electric Plans Major Fundraise
Ola Electric, the electric two-wheeler manufacturer, has initiated a strategy to gather up to Rs 1,500 crore via the issuance of equity shares or convertible securities. The proposal received approval from the company’s board on September 5. This potential fundraise may occur through several methods including a public offer, rights issue, qualified institutional placement (QIP), private placement, or any other approved avenues, subject to necessary shareholder and regulatory consents.
Recent Financial Moves
This announcement follows Ola Electric’s previous successful fundraising effort, where it garnered Rs 780 crore through a QIP in June. During that round, approximately 21.76 crore shares were allocated at a price of Rs 35.86 each to qualified institutional buyers.
Resignation of COO
In a noteworthy development, Ola Electric’s Chief Operating Officer, Hyun Shik Park, has resigned from his position, effective from the close of business hours on September 5. The company indicated that Park stepped down from his role in senior management due to personal reasons.
Challenges in the EV Market
The new fundraising effort takes place at a challenging moment for the electric vehicle (EV) two-wheeler maker, as it faces issues like a declining market share, growing customer complaints, and a notable drop in its share price and overall market capitalisation.
Recent Financial Performance
In Q1 FY27, Ola Electric experienced a 45% year-on-year decline in revenue from operations, amounting to Rs 455 crore. However, the company managed to reduce its net loss to Rs 336 crore from Rs 428 crore in the previous year. In July, Ola Electric registered a total of 13,170 vehicles, which translates to a 6.8% market share.
Battery Manufacturing Expansion
Ola Electric has also been enhancing its battery-cell manufacturing capabilities. The company recently obtained Rs 95.81 crore under the government’s Production-Linked Incentive (PLI) Auto scheme for FY27.
The board of Ola Electric has additionally approved a proposal to raise the company’s authorised share capital from Rs 8,318.5 crore to Rs 8,721.9 crore, pending the consent of shareholders.