News update
- FromStartupStory | February 12, 2024
Ola Electric received Domestic Value Addition (DVA) certification for its S1 Pro (Gen-2) scooter this week, marking a major milestone under the Auto PLI program. With this achievement, Ola Electric has become the first Indian two-wheeler manufacturer to receive the DVA certificate under the PLI scheme, making the company eligible for incentives for up to five consecutive financial years starting from financial year 2023-24. “The scheme enables Ola Electric to receive incentives for up to five consecutive financial years starting from financial year 2023-24. The incentive would be between 13% and 18% of the determined retail value (DSV) of the products,” said sources familiar with the matter.
According to Moneycontrol, the certification for Ola Electric's S1 Pro (Gen-2) scooter comes close on the heels of the previous certification for the S1 Air scooter. Bhavish Aggarwal-led Ola Electric has successfully secured certification for its second product under the PLI program secured, a remarkable achievement in the electric vehicle industry. “Ola S1 Pro and Ola S1 Air are now eligible for subsidies under the government’s Auto PLI scheme for five years from the certification date,” Moneycontrol’s report said.
Ola Electric, which filed its Draft Red Herring Prospectus (DRHP) with SEBI for an IPO worth INR 7,250 Cr in December, has taken strategic steps to consolidate its position in the market. The IPO comprises a fresh issue worth INR 5,500 Cr and an offer-for-sale (OFS) component worth INR 1,750 Cr, with major investors such as Softbank, Temasek, Tiger Global and others participating in the OFS. “The company applied for PLI certification for S1 Pro from ICAT, Manesar in the second half of October and received the certification on February 9, 2024,” reports said.
Proceeds from the IPO are earmarked for various purposes, including capital expenditure on the Ola Gigafactory project, investment in research and product development, and repayment of debt of subsidiary Ola Electric Technologies. Ola Electric's financial performance has come under scrutiny. In FY2023, losses amounted to Rs 1,472 Cr. INR reported, representing a significant increase over the previous financial year. “During the same period, revenue from operations increased more than seven times year-on-year to Rs 2,630 crore. INR in FY23 against 373.4 Cr. INR in FY22,” the company said.
The financials for the first quarter (Q1) of FY2024 offer further insight: Losses stood at INR 267.1 Cr against operating revenue of INR 1,242.7 Cr in the period under review. Ola Electric's performance amid these financials highlights both challenges and opportunities in the evolving electric vehicle landscape.
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