Synopsis
Ola Electric has launched a qualified institutional placement (QIP) with a floor price of Rs 37.74 per share to raise funds amidst challenges like slowing sales and shrinking market share. The company aims to navigate these issues by doubling down on localisation and vertical integration, with a focus on EV products and cell manufacturing.Listen to this article in summarized format
In October, Ola Electric's board approved a plan to raise up to Rs 1,500 crore through a QIP, though people familiar with the matter said the company may ultimately raise a smaller amount.
Depending on investor demand, Ola Electric may also offer a discount of up to 5% on the floor price, according to the filing.
The company currently has a market capitalisation of Rs 17,436 crore. It had raised Rs 5,500 crore in fresh capital through its initial public offering (IPO) in August 2024.
Ola Electric’s QIP has been priced at nearly 50% less than its IPO valuation of over Rs 35,000 crore. The stock, which was issued during the public offering at Rs 76 apiece, went as high as Rs 110 in September 2024 but has been on a steady decline since then. It touched an all-time low of Rs 22 in March this year before starting to recover again as the company recalibrated its business to reduce losses even at the cost of contracting market share.
According to the pre-placement document for the QIP, the proceeds will be used to repay certain outstanding borrowings of the company and its subsidiaries, fund organic growth initiatives, and meet general corporate requirements.
Ola Electric said that it and its two material subsidiaries had total outstanding borrowings of Rs 2,521 crore as of May 20.
Motilal Oswal is the banker to Ola Electric's QIP.
The fundraising comes at a time when Ola Electric is grappling with slowing sales, market share pressures and continued losses in the electric two-wheeler market.
On May 14, the company also announced a Rs 2,000 crore investment in its wholly owned subsidiaries focused on electric vehicle and battery manufacturing, as it seeks to deepen localisation and vertical integration.
Ola Electric reported a consolidated net loss of Rs 500 crore for the quarter ended March 2026, narrowing 42.5% from Rs 870 crore a year earlier, aided by lower expenses. In the preceding quarter, the company had reported a loss of Rs 487 crore.
For FY26, the company posted a consolidated net loss of Rs 1,833 crore, compared with Rs 2,276 crore in FY25. Revenue from operations fell sharply to Rs 2,253 crore from Rs 4,514 crore a year earlier.
Brokerages have also flagged concerns over market share erosion and cash burn. Citi earlier downgraded the stock and cut its target price, citing persistent challenges to volume growth and mounting balance sheet pressures.
The company recently reported a recovery in registrations, with May registrations rising to 14,752 units.
Ola Electric said the final issue price will be determined in consultation with the book-running lead managers.
“For Q1 FY27, we expect 40,000-45,000 orders and consolidated revenue of Rs 500-550 crore, nearly double Q4 levels. As volumes recover, we expect the auto business to move towards adjusted operating EBITDA and free cash flow positivity through FY27,” founder and chief executive Bhavish Aggarwal said in the shareholder letter.
The company's focus remains on its EV portfolio, particularly electric motorcycles and cell manufacturing, he added.
( Originally published on Jun 01, 2026 )
