Ola Electric Mobility Ltd is anticipating the initiation of operations at its Giga factory in Tamil Nadu by March 2024. As part of its plans for the initial public offering (IPO), Ola Electric Mobility intends to utilise Rs 1,226 crore from the IPO funds to enhance the lithium-ion cell manufacturing capacity in the later phases of the factory.
Having been selected for the government’s ambitious Rs 18,100-crore production-linked incentive scheme for advanced chemistry cell storage manufacturing, Ola Electric has been granted a capacity of 20 GWh under this initiative.
Construction of the facility, operated by subsidiary OCT, commenced in June, strategically located near Ola Futurefactory, where the company manufactures electric two-wheelers and certain components.
Ola Electric expressed the belief that developing in-house cell manufacturing capabilities will provide greater control over the quality, supply, and cost of batteries and electric vehicles (EVs), as stated in its Draft Red Herring Prospectus (DRHP).
The Giga factory in Krishnagiri, Tamil Nadu, is expected to start operations with a cumulative capacity of 1.4 GWh, slated to expand to 5 GWh by October. The first phase is funded through internal accruals and long-term borrowings secured by OCT.
In October, the Bengaluru-based company raised Rs 3,200 crore through a combination of equity and debt from investors led by Temasek and the State Bank of India, with the funds earmarked for business expansion, including the Krishnagiri facility.
The Giga factory’s cumulative capacity will be further expanded in the second phase to 6.4 GWh by April 2025 and to 20 GWh by June 2026 in subsequent phases. The IPO proceeds will allocate Rs 1,226 crore for the capital expenditure involved in expanding capacity in the second phase.
Having filed a Draft Red Herring Prospectus (DRHP) with SEBI for an IPO, Ola Electric aims to raise Rs 5,500 crore by issuing fresh equity. The public issue also encompasses an offer for sale by existing promoters and investors, including founder Bhavish Aggarwal, comprising 95,191,195 shares.
