Companies
Ola Electric’s IPO: For Bhavish Aggarwal and top employees more riches in store
Summary
- Ten of the company’s top executives are sitting on a potential cash value of ₹10,260 crore, of which Bhavish Aggarwal’s stake alone is worth a little more than ₹9,900 crore, or about $1 billion.
- Early investors and a couple of Bollywood stars are also expected to reap windfall gains in the IPO.
Bengaluru/Mumbai: Several top executives and early investors in Ola Electric Mobility are expected to make a killing when the company becomes the first pureplay homegrown electric vehicle manufacturer to list on the stock exchanges.
Ola Electric’s top 10 executives are sitting on a potential cash value of ₹10,260 crore, based on the lower end of the ₹72-76 price band that is set for the IPO, which will open for subscription on Friday, Mint’s analysis of its draft red herring prospectus showed.
Of that, founder and chief executive Aggarwal’s stake alone is worth about ₹9,919 crore, or $1.18 billion ($1 = ₹83.75).
He will be selling 37,912,211 equity shares in the IPO, pocketing more than ₹270 crore (at the lower end of the band).
Among the company’s prominent investors are Japan’s SoftBank Group, US hedge fund Tiger Global Management, Matrix Partners India, and Bollywood siblings Zoya and Farhan Akhtar.
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Ola Electric’s total issue size would be worth about ₹6,145.96 crore, including an offer for sale of up to 84.94 million shares worth ₹645.96 crore and fresh issue of shares worth about ₹5,500 crore.
The company’s total market value is expected to be about ₹33,500 crore ($4 billion) at the upper end of the price band. This is asharp discount to the $5.4 billion valuation it had commanded in its last private funding round in September.
“The IPO could boost consumer confidence and attract more investment into the EV sector," said Sanjay Israni, partner at Desai & Diwanji, a corporate law firm.
“While the early-stage investors will reap substantial returns from the offer for sale, it seems that the IPO investors who stay invested in the company for a longer term may also benefit from the fair valuation at which the company is coming out with the IPO."
Windfall gains
Early-stage investors Tiger Global and Matrix Partners India are expected to make windfall gains from the IPO. Tiger Global’s average cost of acquiring Ola Electric shares was ₹11.7 apiece, and Matrix’s, ₹8.22. SoftBank’s average acquisition cost was ₹51.37 apiece.
Among Ola’s top executives, Suvonil Chatterjee, chief technology and product officer of Ola Group, holds Ola Electric shares worth about ₹150.7 crore. Ola Group includes the electric scooter manufacturer that was established in 2017 and the ride-sharing platform Ola Cabs, which was founded in 2010.
Harish Abichandani, chief financial officer of Ola Electric, and N. Balachandar, chief people officer of Ola Group, collectively hold shares worth about ₹53 crore.
Former Byju’s executive Jitesh Shah, whom Ola Electric hired in December to oversee its after-sales charging operations, is sitting on a stockpile worth ₹7.2 crore. Former executives Arun G.R. (group CFO) and Slokarth Dash (former head of planning and strategy) collectively hold Ola Electric shares worth about ₹47 crore.
These current and former employees were granted stock options over the years under the company’s employee stock ownership plan (Esop) policy. To be sure, not all employees have vested their stock options. The typical vesting period at Ola Electric is 4 years.
Other prominent stakeholders who could be sitting on substantial returns include Gaurav Deepak, cofounder of financial services firm Avendus Capital, and Sumit Shah, chief executive of enterprise e-commerce platform Dukaan.
Also read | Firstcry, Ola Electric IPOs to build a club of super-rich
Movie director Zoya Akhtar holds 177,841 equity shares after converting her 194,998 Series C compulsorily convertible preference shares acquired for ₹1.07 crore in December 2021.
Actor and director Farhan Akhtar has converted his 389,996 Series C CCPS, for which he paid ₹2.14 crore, allotted in December 2021, into 355,683 equity shares, according to Ola Electric’s IPO prospectus.
Zoya Akhtar’s shares are expected to be worth ₹1.3 crore, and Farhan Akhtar’s, ₹2.5 crore, earning the sibling duo gains of 22% and 17%, respectively.
