India's Ola Electric eyes lower valuation of $4.5 billion for IPO, sources say

By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) -SoftBank-backed Indian e-scooter maker Ola Electric is likely to value the company at around $4.5 billion for its initial public offering (IPO), around 16%-20% lower than the valuation at its last funding round, two sources told Reuters.

The Indian markets regulator in June approved Ola's $660 million stock market listing, the first IPO by an EV maker in India and set to be one of the country's largest share sales this year.

Ola Electric is likely to list on Indian bourses in the first week of August, said the two sources, who have direct knowledge of the matter, but declined to be named as the discussions are private.

Ola Electric did not immediately respond to a request for comment.

Ola Electric's last funding round in September, led by Singapore's investment firm Temasek, valued it at $5.4 billion, but one of the sources said that would drop this time, pointing to a "recalibration" in the valuation of tech stocks globally.

"Valuations have corrected overall in the market," said the person, adding that the final valuation could still change but is unlikely to come anywhere close to the at least $6 billion that Ola Electric's founder Bhavish Aggarwal had hoped to achieve for the IPO.

The second source said Ola Electric's valuation is likely to be lower as "the company wants the IPO to be attractively priced so there is an opportunity for investors to create wealth".

India is seeing a sharp surge in IPOs, with its stock markets near record highs. Benchmark Indian stock indices have doubled between 2019 and 2023.

The country's burgeoning stock market overtook Hong Kong's earlier this year to become the world's fourth-largest. South Korea's Hyundai Motor is also planning to list its India unit, aiming to raise up to $3 billion at a valuation of up to $30 billion.

Ola Electric was founded in 2017. It dominates the e-scooter market with a 46% share and competes with TVS Motor, Bajaj Auto and Ather Energy.

In December last year, Ola Electric slashed its sales goals for 2023-25 by more than half and delayed its target of achieving profits by a year after reduced government incentives pushed up e-scooter prices.

Its consolidated loss widened to 14.72 billion Indian rupees ($176.14 million) for the year ended March 2023, while revenue from operations climbed more than seven times.

($1 = 83.5714 Indian rupees)

(Editing by Kirsten Donovan and Arun Koyyur)