New Delhi: Temasek, a Singapore-based company, will lead a $300-$350 million round in Ola Electric, a portfolio firm with an infusion of $100-$150 million, as per the reports—the above deal is in the final stage of due diligence.
The deal may be worth $6 billion for Bhavish Aggarwal’s Ola Electric, 20% higher than the $5 billion valuation it received in its most recent investment round in early 2022.
The manufacturer of electric two-wheelers, which aspires to enter the market for passenger EVs, began roping in IPO bankers last month in preparation for a prospective offering early the following year, shortly before the general elections in 2024.
In January 2022, Ola Electric received funding of about $200 million from Alpine Opportunity Fund, Tekne Private Ventures, and Edelweiss at a valuation of $5 billion.
The EV maker will have to move at lightning speed to be able to list within this time. To achieve its objectives, it might file draft IPO papers to the market regulator by the start of the following quarter.
In July, the business is anticipated to release a lower-priced version of its S1 scooter, which will be less expensive than the 3kWH Ola S1 Air, for which final payments and deliveries have not yet started. Like its peers, the company has had to raise the prices of its scooters following the government’s move to slash FAME-II subsidies on e-two-wheelers. Besides, it has also chosen to cancel the launch of the smaller 2kWh variant of the S1 Air scooter, which was scheduled to cost ₹84,999.
Singapore state’s investment arm Temasek has amped up investments in India over the last five years, deploying around $1 billion yearly, or nearly 5% of its total investments globally.
It first invested as part of a $53 million round in Ola Electric in 2021, valuing it at $2.7 billion. “The EV space in India is growing at a fast clip with clear winners emerging based on the sales numbers and growth plans. Temasek is betting big on the category in India,” said a person in the know of Temasek’s plans.
Emails sent to Temasek and Ola Electric did not elicit any response till press time. The government’s move to slash subsidies on electric two-wheelers is expected to have a short-term impact on sales as the market readjusts to higher prices under the new subsidy regime.
Ola Electric, along with TVS Motor Company, Ather Energy, and Hero MotoCorp, had to return the cost of on-board chargers they had been charging customers after the government cracked down on the companies for under-invoicing to meet FAME-II eligibility norms.
“Because existing investors are leading the round and it is essentially an internal round, Ola won’t suffer much in view of the FAME-II uncertainties that have been affecting competition”, a person close to the fundraising plans told.
Total e-scooter registrations in May exceeded 1.05 lakh units, with Ola Electric at just over 27% market share, TVS Motor Co. gaining a lead at the second spot with an increased market share of 19.3% and Ather Energy being the third-largest player at 14.6% market share.
