IPO-bound Ola Electric gets PLI certification for its second scooter; to receive incentives for 5 years: Report

IPO-bound Ola Electric has received the Domestic Value Addition (DVA) certification for Ola Electric’s S1 Pro (Gen-2) scooter, a report by news platform Moneycontrol said. This is the second DVA for Ola Electric, issued by the Ministry of Heavy Industries under the Production-Linked Incentive (PLI) scheme for the automobile and auto component industry.

Earlier in January, the Bengaluru-based Ola Electric became the first two-wheeler EV-maker to become eligible for the PLI scheme as its S1 Air scooter received DVA. The two products are now eligible for various subsidies offered by the government for the next 5 years.

"The PLI certification is a testament to our vertically integrated manufacturing capabilities and a significant milestone in our quest to accelerate India's journey towards clean mobility," the company said after receiving its first certification in January.

The implementation of the government's automotive Production Linked Incentive (PLI) scheme is poised to significantly contribute to the localization of supply chains and the enhancement of domestic manufacturing. Simultaneously, it will facilitate companies in attaining economies of scale, thus fostering a robust and sustainable growth trajectory, it added.

The Moneycontrol report said that Ola Electric can receive incentives for a maximum of five years, starting from the financial year 2023-24. These incentives will be calculated as a percentage between 13% and 18% of the determined sales value (DSV) of their products.

Ola Electric to raise ₹5,500 crore via IPO

The development comes almost two months after Ola Electric filed draft papers for an initial public offering (IPO) to raise ₹5,500 crore.

The funds generated from the issue of new shares will be allocated to various purposes, including enhancing the capacity of the Ola Gigafactory's cell manufacturing subsidiary from 5 GWh to 6.4 GWh, repaying or prepaying debts accrued by Ola Electric, investing in research and product development, and supporting organic growth strategies, as outlined in the preliminary prospectus. The projected cost for expanding capacity is estimated to be ₹1226 crore.