(News Bulletin 247) – India’s leading electric scooter maker raised $734 million on the Bombay Stock Exchange on Friday. It was a success for the country’s largest IPO since Life Insurance Corp of India in May 2022.

India’s first electric scooter maker Ola Electric Mobility successfully entered the market on Friday after raising $734 million, in a sector driven by growing demand for battery-powered electric vehicles.

Ola Electric, backed by international investors including Japan’s Softbank and Singapore’s Temasek, has managed to take the lead in the market in a country with huge potential and which is beginning to take an interest in the use of electric vehicles.

Less than 6% of the nearly 18 million scooters and bikes sold in India in the fiscal year ending March 2024 were electric. Ola says that in the long run, savings on fuel will offset the country’s lack of battery charging infrastructure.

The Indian government has invested more than $1 billion to subsidise the sale of electric and hybrid vehicles over the past five years in a bid to reduce carbon emissions from petrol-powered vehicles.

“Tesla is for the West, Ola is for the rest,” Ola founder Bhavish Aggarwal, now a billionaire, puts it with a hint of insolence. “Our hard work has paid off and the world is recognizing it,” Bhavish Aggarwal wrote on X.

The company’s shares jumped to 91.20 rupees ($1.09), 20 percent above their IPO price of 76 rupees ($0.90).

A first scooter launched in 2021

Bhavish Aggarwal founded Ola Electric in 2017 after creating Ola Cabs, a popular ride-hailing app that competes with Uber in India and is enjoying considerable success.

Ola Electric’s first scooter was launched in 2021 after many challenges, especially regarding safety. But the company has outpaced bigger competitors such as TVS, Bajaj Auto and Hero Electric.

In 2021, it announced plans to invest $920 million to build a massive electric vehicle hub in the southern state of Tamil Nadu.

Despite its success, the company continues to lose money. Its sales doubled to more than 329,000 units in the fiscal year that ended last March, but its losses also increased by 7.6% year-on-year to just under $190 million.

Ola Electric’s IPO is the biggest in the country since Life Insurance Corp of India in May 2022, Bloomberg reports. That’s because the booming stock market in the world’s fifth-largest economy has seen a flurry of IPOs in the past two years, with startups and corporates raising billions of dollars from domestic and foreign investors.

(With AFP)