The following article provides all the information you would need to know about the increased authorised share capital of Ola Electric.
Incorporated on February 3, 2017, Ola Electric Mobility Private Limited is a private, unlisted company. It is based in Bangalore, Karnataka, and is categorised as a private limited business. Its total paid-up capital is ₹3,765.15 crores, while its authorised share capital is ₹3,825.32 crores.Ola Electric, the electric manufacturer of two-wheelers, run by Bhavish Aggarwal, may go public much sooner than it is expected. The manufacturer of unicorn EV increases authorised share capital by an astounding 17,121% despite having trouble delivering its highly anticipated EV scooters, the S1 and S1 Pro.In an EGM held on 22 December 2021, Ola Electric decided to expand its authorised share capital from the current ₹22.2 Crores to ₹3,825 Crores. One of the initial steps before becoming a public company and filing a DRHP (Draft Red Herring Prospectus) with the market regulator SEBI is increasing the permitted share capital.Before filing its DRHP for an ₹8,430 Crores IPO (Initial Public Offering), the hospitality unicorn OYO had increased its authorised share capital from ₹1,17,80,010 to ₹9,01,13,59,300. Recently in September, the share capital of Snapdeal increased from ₹16.08 crores to ₹206 crores before filing DRHP earlier this week for ₹1,250 crores.Additionally, the company awards bonus stocks to all stockholders, which is a vital step for a business preparing for an IPO. Ola Electric’s board has suggested issuing wholly paid-up bonus shares in a ratio of 1,94,998:1 to the current owners of all shares, according to recent filings.
Authorized share capital is the maximum amount of capital that a company is permitted to raise through the sale of its shares. Ola Electric is an Indian electric vehicle company that recently announced an increase in its authorized share capital from Rs. 300 crore to Rs. 1,000 crore. This increase will allow the company to raise more funds and expand its operations. With this move, Ola Electric aims to strengthen its position in the Indian EV market and accelerate the adoption of electric vehicles in the country.
Many weeks after Ola Electric received ₹16,443,169,800 from Japan’s SoftBank, Falcon Edge, and few other current investors, the development started taking place. According to Ola Electric, the money raised would support the company’s ongoing development of other vehicle-based platforms, such as mass-market vehicles, electric motorbikes and electric automobiles.
As per many reports, Ola Electric may seek to raise yet another fundraising round.
Bhavish Aggarwal discussed the company’s ambitions for an IPO in a recent interview.”Both companies, in due course, will go public. Ola will obviously go public sooner, it’s a more mature business — sometime next year, but we don’t have any final date to share with everybody,” Ola Electric’s co-founder had previously stated.The Aggarwal-led mobility platform Ola recently obtained an ₹41,107,924,500 Term Loan B to support its many businesses, which include financial services, ride-hailing, food delivery services (Ola Foods), fast commerce, and vehicle commerce.Launched in 2017, Ola Electric entered the acclaimed unicorn club in less than two years of its founding after raising ₹20,553,962,250 from Masayoshi Son-led SoftBank.Earlier this year, the firm released the S1 and S1 Pro in August. Due to a technical issue, the EV unicorn had planned to hold the live sale on 08 September 2021 but decided to postpone it to 15 September.
The startup has also postponed the e-scooter delivery. From the initially anticipated date of 25 October to 25 November, the deliveries’ first batch was pushed back to 15 December (would be continued until 30 December). A number of the orders have now been given to the clients by the startup.Ola Electric competes with companies like Bounce Infinity, Ather and Simple Energy, all based in Bengalore. The company is growing and expanding every day. Hence, the steps to make the company public have been taken.When a company goes public, there are many reasons behind that. An Initial Public Offering (IPO) enables a business to expand its visibility and reputation in the market. Customers can trust the company and all the goods and services it offers as a result. A public listing of shares may also result in simple mergers and acquisitions and smoother money flow.A large amount of liquidity is attained by selling the stocks. It helps the business achieve financial stability, improving price transparency. It also provides a liquid entity for stockholders who have been involved with the company for a long time.After stock lists are on the exchange, the value of a company’s stock is determined by how much an investor is willing to pay for it. Thus, it also informs third parties of the company’s present worth or value. The company’s IPO debut and increased visibility might even result in a boost in the company’s credibility. In addition, by frequently reporting to SEBI, the fiscal data can be transparent and meet SEBI’s requirements.
An IPO boosts capital, which is one of its significant advantages. However, alternative funding strategies, such as loan applications, are more costly and risky. Banks provide a finite amount of money for the company seeking a loan, and the interest rates are typically hefty. Conversely, an IPO might give the business a one-time cash infusion to pay off debts, fund research and development, grow the business, etc.
IPO Procedure
Proposals
The proposals and valuations that the underwriters submit discuss the appropriate type of security to issue, the offering price, the number of shares, and the anticipated time frame for the market offers.
Underwriter
The corporation selects its underwriters through an underwriting agreement and formally accepts to underwrite terms.
Team
Underwriters, attorneys, certified public accountants (CPAs), and Securities and Exchange Commission (SEC) specialists constitute IPO teams.
Documentation
The company’s information is gathered for the necessary IPO paperwork. The main IPO filing document is the S-1 Registration Statement. The prospectus and the privately held filing information make up its two components.
- The S-1 contains a preliminary description of the anticipated filing date.
- It will go through numerous revisions during the pre-IPO process. The prospectus that is presented is also updated frequently.
Marketing & Updates
For the pre-marketing of the new stock issuance, marketing materials are prepared. Management and underwriters publicise the share issuance to determine a final offering price and gauge demand. Under the marketing process, underwriters are permitted to modify their financial analysis. It may entail altering the IPO price or the issue date if necessary. Companies take the appropriate actions to satisfy particular requirements for public share offerings. Businesses must follow both SEC standards for public firms and exchange listing requirements.
Board & Procedures
Create a board of directors and ensure procedures are in place for reporting quarterly auditable financial and accounting data.
Shared Issues
On the IPO date, the company issues its shares. The balance sheet shows stockholders’ equity as capital from the primary issuance to shareholders as cash received. As a result, the value of each share on the balance sheet is entirely based on the corporation’s shareholders’ equity per share valuation.
Post-IPO
There might be specific post-IPO provisions put in place. Following the initial public (IPO) day, underwriters might have a set period to purchase more shares. During this time, certain investors can experience silent periods.
Conclusion
The article above mentions all the details about the increased authorised share capital of Ola Electric vehicles. If you need to know about any other details related to any legal matters, contact Vakilsearch. The experts here are always available to answer your queries and help you.
FAQs
How does an increase in authorized share capital impact Ola Electric's financial position?
An increase in authorized share capital does not directly impact Ola Electric's financial position. It only increases the maximum amount of share capital that the company is authorized to issue to its shareholders. This increase in authorized share capital allows the company to raise more funds and expand its operations.
What is the significance of Ola Electric's decision to boost its authorized share capital for investors?
Ola Electric's decision to boost its authorized share capital is significant for investors as it indicates the company's intention to raise more funds and expand its operations. This move can potentially increase the company's valuation and provide more investment opportunities for investors.
How does Ola Electric's move to expand its authorized share capital align with its growth strategy?
Ola Electric's move to expand its authorized share capital aligns with its growth strategy as it allows the company to raise more funds and expand its operations. The company has been expanding its product portfolio across segments of two-wheelers and four-wheelers and has been building on its plan to develop core technologies like cell manufacturing.
Will this increase in authorized share capital lead to dilution for existing shareholders of Ola Electric?
An increase in authorized share capital does not lead to dilution for existing shareholders of Ola Electric. Dilution occurs only when the company issues new shares to raise funds. The decision to issue new shares is taken by the company's board of directors and requires shareholder approval.
What does this development indicate about Ola Electric's ambitions and future plans in the electric mobility sector?
Ola Electric's decision to increase its authorized share capital indicates the company's ambitions and future plans in the electric mobility sector. This move can potentially increase the company's valuation and provide more investment opportunities for investors, which can help the company achieve its growth plans.
How does Ola Electric's increase in authorized share capital compare to similar moves made by other companies in the industry?
Ola Electric's increase in authorized share capital is not unique to the company. Many companies in the industry have increased their authorized share capital to raise more funds and expand their operations.
For example, the hospitality unicorn OYO had increased its authorized share capital from ₹1,17,80,010 to ₹9,01,13,59,300 before filing its DRHP for an ₹8,430 Crores IPO. However, the magnitude of Ola Electric's increase in authorized share capital is significant, as it has increased its authorized share capital by 172 times.
What are the potential implications of Ola Electric's expanded authorized share capital on its competition with other electric vehicle companies?
Ola Electric's expanded authorized share capital can potentially have implications on its competition with other electric vehicle companies. This is because it allows OLA to raise more funds and expand its operations, which can help the company increase its market share.
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