SOFTBANK-BACKED Indian e-scooter maker Ola Electric’s initial public offering (IPO) is set to draw investor bids from Fidelity, Nomura and Norway’s Norges Bank, as well as several Indian mutual funds, two sources with direct knowledge said.
Ola Electric’s roughly US$740 million IPO will open this week and will be the first by an Indian electric vehicle maker. The company is the biggest player in the e-scooter market in a country where the adoption of clean vehicles is still low but rising rapidly.
Fidelity will place bids of around US$75 million while Nomura and Norges will bid US$100 million each in Ola’s so-called IPO anchor book, where high-profile institutional investors are allotted shares before the subscription opens for other investors, said the first source with direct knowledge of the bid amounts.
At least four Indian mutual funds including SBI, HDFC, UTI and Nippon India will place bids, the two sources said, with the first source estimating their collective bid amounts at more than US$700 million.
Ola Electric did not respond to a request for comment. None of the investors named above immediately responded on Sunday (Jul 28) outside regular business hours.
Ola’s IPO, one of the biggest in India this year, will see the company issue new shares to raise US$660 million and also see its existing investors, including founder Bhavish Aggarwal, offload their stake of about US$80 million to IPO investors.
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Quota for anchor investors in the IPO is about US$330 million, the first source said.
Sources had earlier said the IPO is expected to value the company at around US$4.2 billion to US$4.4 billion, but the sources on Sunday said the final valuation is lower at around US$4 billion to US$4.2 billion.
That valuation is about 22 to 26 per cent lower than in Ola’s last funding round in September, which was led by Singapore’s investment firm Temasek and valued the country’s largest e-scooter maker at US$5.4 billion.
The lower valuation for the IPO is because of a correction in the valuation of global tech companies globally and as Ola wants to ensure high participation in the stock offering, sources have said.
The IPO comes amid heightened capital markets activity in India, where stock markets are trading near a record high. REUTERS
