Temasek to lead Ola Electric’s $350 mn fundraising round

According to them, the deal could value Bhavish Aggarwal-led Ola Electric to $6 billion, 20% higher than the $5 billion valuation it secured in the last funding round in early 2022.

In response to emailed queries, a Temasek spokesperson declined to comment.

The electric two-wheeler maker, which has aspirations to foray into passenger EVs, started roping in IPO bankers last month for a potential listing early next year, just before the general elections in 2024.

Ola Electric raised around $200 million from Tekne Private Ventures, Alpine Opportunity Fund and Edelweiss at a valuation of $5 billion in January 2022.

The EV maker will have to move at lightning speed to be able to list within this time. It could file draft IPO papers with the market regulator by early next quarter to realize its goals.

The company is expected to launch a lower variant of its S1 scooter in July, which will be priced below the 3kWH Ola S1 Air, for which final payments and deliveries are yet to begin. The company, like its peers, has had to raise the prices of its scooters following the government’s move to slash FAME-II subsidies on e-two-wheelers.

Besides, it has also decided to pull the plug on the smaller 2kWh variant of S1 Air scooter, which was to be launched for ₹84,999. Singapore state’s investment arm Temasek has amped up investments in India over the last five years, deploying around $1 billion every year, or nearly 5% of its total investments globally.

It first invested as part of a $53 million round in Ola Electric in 2021, valuing it at $2.7 billion. “The EV space in India is growing at a fast clip with clear winners emerging based on the sales numbers and rowth plans. Temasek is betting big on the category in India," said a person in the know of Temasek’s plans.

Emails sent to Temasek and Ola Electric did not elicit any response till press time. The government’s move to slash subsidy on electric two-wheelers is expected to have a short-term impact on sales as the market readjusts to higher prices under the new subsidy regime.

Ola Electric, along with Ather Energy, TVS Motor Company and Hero MotoCorp had to return the cost of on-board chargers they had been charging customers after the government cracked down on the companies for under-invoicing to meet FAME-II eligibility norms.

“Because the round is being led by existing investors and is essentially an internal round, Ola won’t suffer much in view of the FAME-II uncertainties that have been affecting competition", a person close to the fundraise plans told Mint.

Total e-scooter registrations in May exceeded 1.05 lakh units, with Ola Electric at just over 27% market share, TVS Motor Co. gaining a lead at the second spot with an increased market share of 19.3% and Ather Energy being the third-largest player at 14.6% market share.