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Ola Electric IPO: Revolutionizing the Electric Vehicle Industry

Introduction

The Indian electric vehicle (EV) industry is set to witness a groundbreaking moment as Ola Electric, backed by SoftBank Group and Temasek, filed its preliminary draft papers on December 22, with the Securities and Exchange Board of India (SEBI) to raise Rs5,500 crore through an initial public offering (IPO) ¹. This IPO will mark a significant milestone as it will be the first IPO by an Indian EV maker and the first by a two-wheeler maker in India since 2008 . With a mission to revolutionize the EV industry, Ola Electric aims to create sustainable and accessible mobility solutions for the Indian market.

The Ola Electric IPO Details

The Ola Electric IPO proposes a fresh issue of equity shares worth up to ₹5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares at a face value of ₹10 ¹. The founder of Ola Electric, Bhavish Aggarwal, plans to sell up to 47.4 million shares in the IPO ². The IPO dates and the offer price have not been announced yet, but reports suggest that the public issue may open in early 2024.

Allocation for Each Category of Investor

The IPO process follows a book-building approach, with specific allocations for different categories of investors ¹. The allocation is as follows:

75% of the issue for qualified institutional buyers (QIBs)
Up to 15% for non-institutional investors (NIIs)
Not more than 10% for retail individual bidders

Use of Funds

The net proceeds from the IPO will be allocated for various purposes, as stated in the Draft Red Herring Prospectus (DRHP) :

₹1,226.4 crore for Ola Cell Technologies’ Gigafactory project
₹1,600 crore for research and development (R&D) investments
₹350 crore for organic growth initiatives and general corporate purposes
₹800 crore to repay/pre-pay debts of Ola Electric Technologies (OET)

Ola Electric’s Business Model and Financials

Business Model

Ola Electric’s business model is built on three key scalable platforms :

R&D and technology platform: Ola Electric has in-house design and development capabilities across EV technologies and components.
Adaptable manufacturing and supply chain platform: The company has established a robust manufacturing and supply chain infrastructure.
D2C omnichannel distribution platform: Ola Electric has 935 experience centers across India, including service centers, providing a direct-to-consumer distribution model.

Revenue Surge and Product Portfolio

In the fiscal year 2023, Ola Electric witnessed a substantial increase in revenue from operations, reaching ₹2,630.93 crore compared to ₹373.42 crore in the previous year . The company’s revenue from operations for the quarter ended June 30, 2023, was reported at ₹1,242.75 crore . Ola Electric introduced its first EV model, the S1 Pro, in August 2021, and currently has a portfolio of five scooter models .

Losses and Risk Factors

While Ola Electric has experienced revenue growth, it has also incurred losses. In FY23, the company reported a net loss of ₹1,472 crore, compared to ₹784.1 crore in the previous fiscal year . The IPO carries certain risk factors, including the company’s limited operating history and the potential for continued losses in the near term .

Ola Electric’s Impact and Future Plans

Sales Highlights and Market Share

Ola Electric has made significant strides in the Indian EV market. In November 2023, the company achieved its highest-ever sales, reaching 30,000 units and capturing a 35% market share ¹. Since its launch in December 2021, Ola Electric has sold over 300,000 electric vehicles, with 9,841 e-scooters sold in December alone .

Ola Electric’s Vision for the Future

Ola Electric aims to expand its presence in the international market by exploring opportunities to export EVs . The company plans to leverage its R&D capabilities and manufacturing infrastructure to develop new EV models and technologies, contributing to the growth and adoption of electric mobility in India and beyond.

Conclusion

The Ola Electric IPO represents a significant milestone in the Indian EV industry. With its innovative business model, impressive revenue growth, and commitment to sustainability, Ola Electric is poised to reshape the future of mobility. As the company continues to invest in R&D, expand its product portfolio, and capture a larger market share, it is well-positioned to drive the transition to electric mobility in India and make a lasting impact on the global stage.

Disclaimer: This is not a financial advice and do your own research before making any investment decision.

Happy Forgings IPO: A Lucrative Opportunity to Invest in a Leading Forging Company

Happy Forgings Limited, one of the leading manufacturers of forged and machined components in India, is launching its initial public offering (IPO) today. The IPO will close on December 21, 2023. The company is looking to raise Rs 1,009 crore from the public issue, which comprises a fresh issue of Rs 400 crore and an offer for sale of Rs 609 crore by the existing shareholders. The price band for the IPO is set at Rs 808 to Rs 850 per share. Here are some compelling reasons why you should subscribe to the Happy Forgings IPO.

Continue reading Happy Forgings IPO: A Lucrative Opportunity to Invest in a Leading Forging Company

Credo Brands IPO: A Fashionable Investment Opportunity?

Credo Brands Marketing Limited, the company behind the popular men’s casual wear brand Mufti, is launching its initial public offering (IPO) on December 19, 2023. The IPO aims to raise Rs 550 crore through an offer for sale (OFS) of 1.96 crore shares by the promoters and other shareholders. The price band for the IPO is set at Rs 266-280 per share.

About Credo Brands and Mufti

Credo Brands was established in 1999 by Kamal Khushlani, who envisioned Mufti as a brand that would redefine menswear in India. Mufti offers a wide range of products, such as shirts, t-shirts, jeans, chinos, jackets, blazers, and sweaters, catering to various categories, such as relaxed holiday casuals, authentic daily casuals, urban casuals, party wear, and athleisure. Mufti’s products are designed to provide a youthful and stylish appearance while keeping up with the latest fashion trends.

Mufti has a pan-India presence, with 1,807 touchpoints across 591 cities, comprising of 404 exclusive brand outlets (EBOs), 71 large format stores (LFSs), and 1,332 multi-brand outlets (MBOs). Mufti also sells its products through its website and other e-commerce platforms.

Financial Performance and Valuation

Credo Brands has shown a strong financial performance in the last three fiscal years, with its revenue growing at a compound annual growth rate (CAGR) of 29.8%, from Rs 261.15 crore in FY21 to Rs 509.32 crore in FY23. Its net profit also increased at a CAGR of 374.6%, from Rs 0.57 crore in FY21 to Rs 77.51 crore in FY23. Its earnings before interest, tax, depreciation, and amortization (EBITDA) margin improved from 26.7% in FY21 to 35.1% in FY23, while its return on net worth (RONW) improved from 0.4% in FY21 to 43.8% in FY23.

At the upper end of the price band, Credo Brands is valued at Rs 1,802.49 crore, which translates to a price-to-earnings (PE) ratio of 23.2, based on its FY23 earnings. This is lower than the industry average PE ratio of 33.6, as per the red herring prospectus (RHP). The company also has a healthy balance sheet, with no debt and a cash balance of Rs 64.5 crore as of September 30, 2023.

Strengths and Risks

Some of the key strengths of Credo Brands are:

A well-established and recognized brand in the men’s casual wear segment
A diversified and innovative product portfolio that caters to various customer preferences and occasions
A wide and efficient distribution network that ensures high visibility and accessibility
A strong and experienced management team with a proven track record
A robust financial performance and attractive valuation

Some of the key risks that investors should be aware of are:

The company’s business is dependent on the performance and popularity of its Mufti brand, which may be affected by changing consumer preferences, fashion trends, and competition
The company’s business is subject to seasonal fluctuations and may be adversely affected by factors such as weather conditions, festivals, and holidays
The company’s business is exposed to various operational risks, such as inventory management, quality control, supply chain disruptions, and regulatory compliance
The company’s business is vulnerable to the impact of the COVID-19 pandemic and any other public health emergencies that may affect the demand and supply of its products

Conclusion

Credo Brands IPO is a good opportunity for investors who are looking for a well-established and profitable company in the men’s casual wear segment, which has a strong brand, a diversified product portfolio, a wide distribution network, and an attractive valuation. However, investors should also consider the risks and uncertainties associated with the company’s business and the industry, and make an informed decision based on their risk appetite and investment objectives.

DOMS IPO: GMP jumps on robust subscription status. Should you apply as bidding ends today?

DOMS IPO subscription status: The public issue has been subscribed 15.20 times in the first two days of bidding. (Photo: Courtesy company website)

The GMP of DOMS’ IPO has witnessed a significant surge on the back of strong subscription status. With the bidding phase coming to an end today, market analysts are now weighing in on whether or not investors should apply. The initial response to DOMS’ IPO has been promising, with subscriptions already oversubscribed by more than 3 times. However, experts advise caution, pointing out that investing in IPOs always involves some degree of risk. Anyone considering participating in DOMS’ IPO is advised to consult with a financial expert to help assess the risks and potential returns.

DOMS IPO GMP Status

As mentioned above, shares of the stationery brand are available at a premium of ₹502 in the grey market today. This means DOMS IPO GMP today is ₹502, which is ₹51 higher than its GMP of ₹451 on Wednesday. Market observers said that strong responses by investors and bullish sentiments on Dalal Street could be the possible reason for the sharp rise in DOMS IPO GMP.

DOMS IPO Review

According to Dhruv Mudaraddi, a research analyst at StoxBox, DOMS Industries Ltd.’s IPO presents an attractive opportunity for investors to benefit from the growing stationery and art products industry in India. DOMS boasts a significant market share, particularly in pencils and mathematical instrument boxes, and has optimized its market timing for efficient product delivery. As a result, DOMS has seen strong financial performance and has established a strong presence internationally. However, the IPO is priced at a high P/E multiple of 30x annualized FY24 earnings. Despite this, investors are advised to subscribe to the issue for the benefit of listing gains.

Date:December 15,2023