Ola Electric Sets Sight On Profitability, To Invest In Cell Manufacturing And R&D
Ola Electric will be raising Rs 5,500 crore in primary issue and Rs 645.6 crore via offer for sale from promoter entities and investors.
The path to profitability is clear for Bengaluru-based Ola Electric Mobility Ltd., with its focus on generating cash flows via investing in cell manufacturing and research and development, according to top executives.
The electric scooter maker is investing for growth and expansion in the future, Harish Abichandani, chief financial officer of Ola Electric Mobility, told NDTV Profit in a televised interview. "We are raising capital for cell manufacturing and research and development. All these get factored in terms of the cash flows generated in the future."
"As we scale up, the path to profitability is faster," he said, as the company is looking to raise funds via an initial public offering this week. "Our capex is largely well-funded, both for the auto and the cell side."
Ola Electric will be raising Rs 5,500 crore in the primary issue and Rs 645.6 crore via an offer for sale from promoter entities and investors. More than half of the proceeds from the IPO will be used for capital expenditure and investing in R&D, according to the company's red herring prospectus.
Further, the Bhavish Aggarwal-led company will also use the funds for repayment of borrowing and spending on organic growth purposes.
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Investment in technology, manufacturing, vertical integration and the benefit of volume-linked margin growth will help achieve the path to profitability, founder promoter Bhavish Aggarwal told NDTV Profit.
The average selling price of the EV manufacturer has fallen, given the broadening of their product portfolio, Aggarwal said. "But our revenue has grown significantly," he said. "We are focused on bringing EVs to the mass market and we do expect mass market products to penetrate deeper into the small towns and villages."
"We are building Ola Electric focused on the future of electrification in automotive and this journey is just beginning," Aggarwal said. "Growth is the story; the company is young, and we wanted to bring this company to market early because of its Indian manufacturing story."
