Ola Electric’s Pre-IPO Transformation, Bhavish Aggarwal Reshapes Board And Financial Leadership

Ola Electric is actively gearing up to file for its IPO by the end of this month, with ambitious plans to raise nearly a billion dollars from the public markets. Hence in anticipation, founder Bhavish Aggarwal and his senior leadership are said to be working tirelessly to meet the November deadline for filing the draft red herring prospectus (DRHP), the electric vehicle unicorn is experiencing significant top-level reorganization, as revealed by sources closely connected to Ola Electric.

Aggarwal is said to be targeting on listing Ola Electric before the general elections scheduled for April 2024; hence with this goal in mind, he’s been pushing his team to submit the DRHP no later than this month.

Typically, it takes three to four months for the market regulator, SEBI, to approve an IPO after filing; Agarwal is hoping to have Ola Electric listed by the end of March, taking advantage of the brief window before the mid-April general elections for a market debut.

However, sources cited above suggest that the chances of meeting the pre-election timeline are slim, and Ola Electric may likely have to time its public listing after the general elections in May- June 2024. Moreover, there are concerns within the leadership team that they might not be able to meet their self-imposed November deadline for filing; a source notes, “There might be a week’s delay, give or take.”

Reorganization Before the IPO Filing
Bhavish Aggarwal and the senior management have set on a task to make some significant organizational changes, particularly in its finance department, perhaps because the finance department plays a crucial role when preparing for a public listing.

Given the crucial element of the IPO, former group CFO Harish Abhichandani is said to have returned to an active role at Ola Electric, where he will lead the finance function. Initially, he was brought back to oversee the finance for the automotive division within Ola Electric, but sources indicate that he will now be in charge of the entire finance division.

The Reshuffle
Hence, Abhichandani is said to be introduced as CFO of Ola Electric in meetings with external agencies assisting with the IPO process.
Abhichandani, who has been with Ola for over six years, had moved to the company’s CSR division, Ola Foundation, and the think tank, Ola Mobility Institute, around two years ago.

At that time, GR Arun Kumar had replaced Abhichandani as the group CFO and had taken on a more prominent role; however, recent developments seem to have diminished Arun Kumar’s influence.

Abhichandani’s takeover of the finance function of Ola Electric’s automotive division, which includes electric scooter production and sales, is a significant organizational shift. Abhichandani will now directly collaborate with Aggarwal, and all finance division members will report to him subsequently, reducing Arun Kumar’s involvement in these matters.

These changes have sparked speculation about Arun Kumar’s future within Ola; however, sources believe that it is unlikely that Aggarwal will let go of a key management figure who has been his right-hand man for the past two years, especially right before the IPO filing.

As one source says, “He [Arun Kumar] is still part of the system, but his role is being scaled back,” at the same time, others are of the opinion that Abhichandani’s re-entry is not surprising, as he has been involved in critical projects throughout.

Board Restructuring
Simultaneously, Aggarwal is also in the process of reconstituting Ola Electric’s board by appointing new independent directors.

According to sources, former Airtel CEO Manoj Kohli, Mensa Brands founder Anant Narayan, and YourStory founder Shradha Sharma are expected to join Ola Electric’s board.

Kohli, who previously served as SoftBank‘s country head, used to advise companies invested in by the Japanese fund house, including Ola Electric.
Similarly, Aggarwal has been an investor in YourStory Media Private Ltd, led by Sharma, since 2019.

Existing board members, such as former head of corporate finance Amit Anchal, are expected to step down; the board reconstitution is anticipated to take place in the coming weeks.

The All-Rounded Board
Anant Narayanan, a McKinsey veteran who previously served as the CEO of Myntra, holds board positions in several companies, including Marico and Birla Soft.

Kohli, an experienced corporate executive, sits on the boards of various companies, including Bharti Broadband and WeWork India; on the other hand, Shradha Sharma, who founded YourStory in 2011 to cover startups, is a prominent figure on social media with a substantial following in the startup and entrepreneurship community.

Aggarwal places great importance on media and communication and is also highly active on social media; therefore, it is not surprising to note that Ola Electric has heavily relied on digital marketing and communication to establish its brand.

Ola Electric in the current has not disclosed a valuation expectation for its upcoming public listing; however, with the market debut five to seven months away and several factors in play, the company’s progress in scooter development, production, sales-network expansion, and battery manufacturing will significantly influence its valuation.

Ola Electric currently holds around 35% of the market share in the highly competitive electric two-wheeler market and has demonstrated impressive sales figures; however, despite its leadership position, the company only achieved a modest increase in valuation during the recent funding round compared to early 2022.

The latest equity fundraising of around USD 140 million took considerable time, partially due to bearish sentiment in the private capital market and concerns regarding the company’s ability to meet its own expectations.
Therefore, depending on market share expansion, the company may aim for a valuation of USD 7 billion to USD 8 billion or even USD 10 billion.

Laying The Ground
Ola Electric is actively boosting its sales efforts ahead of the IPO, introducing two low-powered scooter variants in addition to its existing models.

Moreover, Ola, the flagship cab-aggregation service, has recently launched an e-bike taxi service, deploying around 1,000 Ola Electric scooters for this service in Bengaluru alone.

However, while this move opens up more sales opportunities, the company has faced complaints about product quality and customer service, with a recent scooter fire incident in Pune being attributed to unauthorized aftermarket fitments.

The Last Bit,
The road to Ola Electric’s IPO is not without its challenges and uncertainties; while the company aspires to go public before the general elections in April 2024, market dynamics and internal timelines may necessitate an adjustment of their plans.

However, with the changes in leadership, the addition of independent directors to the board, and the company’s strong market position in electric scooter production, the founder and the senior management are doing the groundwork for potential success in the public markets.

As Ola Electric continues to fine-tune its strategy and enhance its product offerings, the world awaits its debut on the stock exchange, poised to witness the next chapter in the electric vehicle industry’s evolution.