Ola Electric’s board on Thursday approved a fundraise of Rs 1,700 crore—its first after listing on public bourses—as the EV maker looks to navigate slimming market share and concerns regarding its path to profitability.
The private placement will happen through issuance of non-convertible debentures (NCDs) or any other securities, in one or more tranches, it said in a stock exchange filing.
This fundraise comes weeks after credit rating agency ICRA downgraded the company’s ratings, citing low sales volumes and a longer-than-expected period of cash burn that has weighed on its bottom line.
Ola Electric, which begins deliveries of its electric motorcycle Roadster X on Friday, expects to tap into the market to boost its market share, giving it an edge over peers like Ather Energy, TVS Motor, and Bajaj Auto.
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In April, TVS Motor became the largest electric two-wheeler manufacturer in India, followed by Ola Electric and Bajaj Auto.
The company has also undertaken several measures to cut costs including shutting down all regional warehouses, letting go of about 1,000 employees, and streamlining its sales and service network.
Despite these steps, the company has faced regulatory setbacks due to rising consumer complaints regarding its vehicles and sales discrepancies in monthly sales data announced by the company and the data on the national vehicle registry, Vahan.
These troubles have led to a 39% year-to-date slump in the Bhavish Aggarwal-led firm’s share price. As of Thursday’s close, the company’s stock was trading at Rs 51.5 apiece.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)
Edited by Kanishk Singh
