Why is Ola Electric hungry for fresh fund raising?

MUMBAI: May 20, 2025: Ola Electric is once again seeking to secure additional funding from general category investors or the capital markets.

Having successfully raised $1 billion across 14 funding rounds from 2017 to 2024, coupled with approximately $734 million from its IPO just nine months ago in August 2024, the company has notified SEBI of its intention to raise funds through non-convertible debentures and other securities.

One possible reason for Ola's renewed funding efforts stems from assessments by the ratings agency ICRA and the Pennsylvania-based global asset management firm Vanguard, which is also an investor in Ola Electric.

Recently, Vanguard significantly reduced its valuation of the Indian ride-hailing company Ola to $1.25 billion (approximately ₹10,437 crore), as reported in a filing with the US Securities and Exchange Commission (SEC). '

This reduction represents a substantial decline of over 80% from Ola's peak valuation of $7.3 billion in 2021, indicating investor caution in light of operational and competitive challenges.

Additionally, ICRA has downgraded the debt ratings of both Ola Electric Technologies and Ola Cell Technologies from 'A' to 'BBB+', while Ola Cell Technologies' ratings were further lowered to BBB- from A3, with a negative outlook.

Ola Electric's net loss widened to Rs 564 crore in the December 2024 quarter, up from Rs 376 crore in the same period the previous year.

Shares of Ola Electric, which were last trading at 51.40 on 20th May, down by -1.16 since 19th May, have taken a sharp dip by than 60 per cent since their peak following its stock market debut in August 2024.

The company has also faced growing competition, slipping from its position as India’s top electric scooter seller.

Ola Electric recorded its lowest monthly sales last month after delivering 19,709 vehicles in April 2025, as compared to 34,160 units in April 2024.

Other market analysts have also indicated that while India's electric two-wheeler market is booming and if Ola's sales growth continues to be impacted, the company may need to explore more capital-raising options, which could pose funding risks.

Market analysts have said the company needs to shore up its sales by north of 40 per cent 30%-40% from the current levels to at least reach the breakeven mark, while others have said Ola Electric path to profitability cannot be before FY27 at the earliest, which means it has to push its numbers and pare down its losses.

• In a regulatory filing, Ola Electric announced that a meeting of its Board of Directors is scheduled for Thursday, May 22, 2025, to discuss and approve the funding proposal.
• Pritam Das Mohapatra, the Company Secretary and Compliance Officer, informed stock exchanges that the company intends to raise these funds through the issuance of Non-Convertible Debentures (NCDs) or other eligible securities, potentially in multiple tranches, via private placement or other legally permissible methods.