Ola Electric’s EV manufacturing unit receives board approval to raise Rs 878 Cr
The fundraise comes at a time when Ola Electric struggles to maintain momentum in the electric two-wheeler space amidst rising competition.
Ola Electric’s wholly owned subsidiary, Ola Electric Technologies, on Tuesday received shareholder approval to raise Rs 878 crore through the issuance of preference shares to Ola Cell Technologies—the battery and cell manufacturing arm of the company.
According to a BSE filing, the subsidiary will issue up to 87.8 crore non-cumulative and non-participating 0.001% Series A optionally convertible redeemable preference shares (OCRPS) of face value of Rs 10 each for a total of Rs 878 crore to Ola Cell Technologies.
While the firm did not disclose how it intended to utilise these funds, companies usually move money within the group for several financial and strategic reasons, including raising funds without taking outside debt, preserving control, tax and accounting purposes, and supporting strategic projects, among others.
Ola Electric Technologies is the electric vehicle manufacturing arm of Ola Electric, producing electric scooters and e-bikes.
Meanwhile, Ola Electric struggles to maintain its market lead in the electric two-wheeler segment, with peers Ather Energy, TVS, and Bajaj Auto reporting increased sales momentum.
In September, the company managed to sell only 12,223 units compared with 24,752 units in the year-ago period. The decline in sales has also added pressure to the public firm that is yet to attain profitability.
In Q1 FY25, Ola Electric reported a 50% slump in its quarterly revenue to Rs 828 crore. The slow sales have also weighed heavily on Ola Electric’s bottomline. Its consolidated Q1 net loss widened to Rs 428 crore compared with Rs 347 crore a year earlier.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)
Edited by Kanishk Singh