Ola Electric Mobility Limited is a pure EV player in Bharat and is building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. They manufacture EVs and certain core EV components like battery packs, motors and vehicle frames at the Ola Futurefactory. They have delivered seven products and additionally announced four new products since the first product announcement in August 2021. On August 15, 2023, they also announced a line-up of motorcycles comprising four models, Diamondhead, Adventure, Roadster and Cruiser. They plan to commence delivery of the motorcycles in the first half of Fiscal 2026. Company undertakes R&D activities in Bharat, the United Kingdom ('UK') and the United States ('US') focused on designing and developing new EV products and core EV components, such as battery packs, motors and vehicle frames. They are in the process of building the EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu, India, which includes their Ola Futurefactory, their upcoming Ola Gigafactory and co-located suppliers in Krishnagiri district. At the Ola Futurefactory, they manufacture the EV scooters using certain EV components manufactured in-house and other components procured from third parties, such as cells. The Ola Futurefactory is the largest integrated and automated E2W manufacturing plant in Bharat (in terms of production capacity of one million units per year as at March 31, 2024) by an E2W-only OEM, as at March 31, 2024, according to the Redseer Report. In addition, they operate a BIC in Bengaluru, Bharat that is focused on developing cell and battery technology and manufacturing processes for the forthcoming cell manufacturing at the Ola Gigafactory. The R&D efforts are centred around five key technologies: (a) software, (b) electronics, (c) motor and drivetrain, (d) cells and battery packs and (e) manufacturing technology. The R&D spend in Fiscals 2024, 2023 and 2022 amounted to Rs 3,851.06 million (comprising research costs of Rs 789.41 million and additions to intangible assets under development of Rs 3,061.65 million), Rs 5,077.11 million (comprising research costs of Rs 860.82 million and additions to intangible assets under development of Rs 4,216.29 million) and Rs 1,758.40 million (comprising research costs of Rs 156.90 million and additions to intangible assets under development of Rs 1,601.50 million), respectively, comprising 7.34%, 18.25% and 38.54% of the total income for such periods, respectively. As of March 31, 2024, they had 959 on-roll and offroll employees engaged in R&D activities (of which 64 are PhD holders). Company operates its own direct-to-customer ('D2C') omni-channel distribution network across Bharat, comprising 870 experience centres and 431 service centres (of which 429 service centres are located within experience centres) as at March 31, 2024 in addition to the Ola Electric website. Total unit sales for FY22, FY23 and FY24 are respectively 20,948 units, 1,56,251 units and 3,29,618 units with market share of around 35% as one 31.03.24 as per Redseer report. In addition to facilitating home charging through portable chargers, they currently also offer their customers exclusive charging services (only for OLA EV scooter owners) through the charging network, which comprised 250 hyper charger guns and 764 standard charger guns as at March 31, 2024, with hyper charging guns spread across 17 states and standard charging guns spread across 21 states, as of such date. The EV scooter owners currently charge their EV scooters at the standard and hyper charger guns for free until August 31, 2024, after which, they may charge for such services. As per financial performance, Ola Electric Mobility Limited has posted total income / net profits of Rs 456.26 Cr / Rs (784.15) Cr (FY22), Rs 2,782.69 Cr / (1,472.07) Cr (FY23) and Rs 5,243.27 Cr / Rs (1,584.40) Cr (FY24). So as per previous financials data, company has shown good sales growth, but making consistent losses and cash-flow is also negative. Company has an average EPS of Rs (3.85) and average RoNW of (63.62)% for last three fiscals. Issue is priced at a P/BV of 13.72 as per NAV of Rs 5.54/- as on 31.03.24. As company is making consistent losses, so there is no point to calculate PE ration. As per RHP, comparison between listed peers is given in above table. On BRLM's front, Four lead managers are associated with this IPO, and have handled around 92 IPOs ( Mainboard and SME ) in last three fiscals. Kotak Mahindra Capital Company Limited: This is 24th IPO from this BRLM. From last 10 IPOs, all opened above issue price on the day of listing. As of now, from last 10 IPOs, all are trading above issue price. (As on 30.07.23) Citigroup Global Markets India Private Limited: This is 10th IPO from this BRLM. From last 9 IPOs, one opened below issue price on the day of listing. As of now, from last 9 IPOs, one is trading below issue price. (As on 30.07.23) Bofa Securities India Limited: This is 5th IPO from this BRLM. From last 4 IPOs, one opened below issue price on the day of listing. As of now, from last 4 IPOs, one is trading below issue price. (As on 30.07.23) Goldman Sachs (India) Securities Private Limited: This is 3th IPO from this BRLM. From last 2 IPOs, one opened below issue price on the day of listing. As of now, from last 2 IPOs, all are trading above issue price. (As on 30.07.23) Axis Capital Limited: This is 37th IPO from this BRLM. From last 10 IPOs, two opened below issue price on the day of listing. As of now, from last 10 IPOs, one is trading below issue price. (As on 30.07.23) ICICI Securities Limited: This is 45th IPO from this BRLM. From last 10 IPOs, two opened below issue price on the day of listing. As of now, from last 10 IPOs, one is trading below issue price. (As on 30.07.23) SBI Capital Markets Limited: This is 21th IPO from this BRLM. From last 10 IPOs, three opened below issue price on the day of listing. As of now, from last 10 IPOs, one is trading below issue price. (As on 30.07.23) BOB Capital Markets Limited: This is 4th IPO from this BRLM. From last 3 IPOs, one opened below issue price on the day of listing. As of now, from last 3 IPOs, two is trading below issue price. (As on 30.07.23) As per financials, Ola Electric Mobility Limited has shown good sales growth, RoNW is (78.46)% and P/E is not available as company is making losses. Company is a pure EV 2W player and wants to become big international player for battery with its future factory and giga factory, which is highly competitive and fragmented business segmented. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO and its only for high risk taking long term investors. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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