The largest domestic initial public offering (IPO) of the year is expected to raise $734 million, according to Indian e-scooter manufacturer Ola Electric. Foreign investors are interested in the sale, although the SoftBank-backed company was recently valued at a much reduced $4 billion.

The IPO coincides with a boom in the Indian stock market, with over 150 businesses raising close to $5 billion through public listings between January and July—nearly twice as much as in the same time last year, according to LSEG statistics.

Investors may wager on the government of Prime Minister Narendra Modi, as well as companies ranging from Tata Motors and TVS to Hyundai Motor, by participating in the first initial public offering (IPO) of an Indian manufacturer of electric vehicles.

After often criticising petrol and diesel automobiles in public, the company’s chairman, Bhavish Aggarwal, is now strongly associated with the slogan “Tesla is for the West and Ola for the rest.”

Ola Electric is now the largest participant in a nation where the adoption of clean vehicles is still modest but growing quickly, with e-scooters starting at about $900. Despite missing sales targets the previous year, it still holds 46% of the e-scooter market.

According to a term sheet, the business, which sold its first scooter in 2021, would be valued at $4 billion following the IPO, which takes place from August 1 to August 6.

This valuation is almost 25% less than Ola’s September fundraising round, which was headed by Temasek, an investment group based in Singapore, and valued the electric vehicle manufacturer at $5.4 billion.

According to sources who spoke on condition of anonymity, Ola also hopes to draw investors to the stock offering, which is why the lower figure results from a correction in the valuation of international IT businesses.

According to sources who requested anonymity, Reuters was informed that investor bids for the IPO are expected to come from Fidelity, Nomura, and Norges Bank at the $4 billion valuation, in addition to a number of Indian mutual funds.

According to the term sheet, Ola would sell off its approximately $77 million interest to IPO investors and issue new shares in order to raise $657 million.

In an advertising published in the Financial Express newspaper, the corporation revealed the price range of 72 to 76 rupees ($0.86-$0.91), with a 7 rupee per share discount for certain qualified personnel.

Aggarwal and investors, including Matrix Partners and SoftBank, will part with a portion of their holdings during the IPO.

10% of the IPO will be allocated for retail investors, according to the newspaper advertisement published on Monday. The money raised will be used to pay for capital expenditures as well as R&D.

Aggarwal also intended to begin selling electric cars in 2024, but according to Reuters, those plans have been shelved so that the business can concentrate on e-scooters. It intends to get into electric bikes as well.

In the fiscal year 2023–24, the firm—which caused incumbents like TVS, Hero MotoCorp, and Bajaj Auto to pivot—reported a loss of 15.84 billion rupees ($189 million) before taxes. The company had already disrupted the two-wheeler industry.

(Adapted from Reuters.com)