Ola Electric IPO: Here's how the financials stack up for Bhavish Aggarwal's company

Ola Electric Ltd. filed draft IPO papers on Friday which shed more light on how the company plans on utilising proceeds from the ₹5,500 crore IPO and also some risk factors associated with it.

Ola Electric is currently a loss-making company. It reported a net loss of ₹267 crore in the June quarter.

For financial year 2023, the net loss for the company stood at ₹1,472 crore compared to a ₹78 crore loss in financial year 2022.

In its DRHP, Ola Electric has mentioned that it has incurred losses and negative cash flows from operating activities for the June quarter and the previous fiscals. "We may continue to incur operating losses in the near term as we invest in our business and expand our product portfolio, build capacity and scale our operations," the IPO document said.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) during the June quarter was a negative ₹218 crore. Ola Electric reported an EBITDA loss of ₹1,252 crore in financial year 2023.

"We cannot assure you that we will be able to manage costs effectively to sell our products at favourable margins or that our expansion into international markets will prove to be profitable," Ola Electric further said in the document.

The company's revenue for financial year 2023 stood at ₹2,631 crore, which is a jump of 8x from the ₹373.4 crore topline it reported in the financial year. For the current June quarter, the company has already reported revenue of ₹1,243 crore, which is 50% of the total revenue it reported during fiscal 2023.

Ola Electric's total liabilities as of June 2023 stood at ₹3,600 crore, compared to ₹3,217 crore as of March.

The company's total liabilities have doubled from ₹1,734 crore at the end of financial year 2022 to the current levels.

Trade receivables for the June quarter stood at ₹92.5 crore from ₹84.2 crore in March. In March 2022, that figure stood at ₹15.2 crore.

As of date, Ola Electric's total borrowings are at ₹1,617 crore, compared to ₹1,646 crore at the end of financial year 2023 and ₹760 crore at the end of financial year 2022.

The company plans to utilise ₹800 crore from the IPO proceeds to repay some of the existing debt.

Ola Electric currently has inventories worth ₹643 crore, based on its IPO document as of June 30 this year. That number in March 2023 stood at ₹583 crore, while in March 2022, it stood at ₹284 crore.

The draft document further said that the company maintains low levels of vehicle inventories at experience centers, with majority of it stored in the distribution centers.

"The distribution centers centrally manage the inventory and arrange for distribution to our experience centers or directly to customer addresses. This central management system enables us to forecast demand and tailor supply orders more accurately," the DRHP said.