Ola Electric IPO Alert: Why Ola Electric's Management Makes Ola Electric IPO Risky?

Ola Electric's biggest controversy is related to its ownership... Bhavish Aggarwal bought a 92.5% stake in Ola Electric from Ola Cabs for just INR 92,500, and valued the company at only 1 lakh, whereas just seven months after the takeover, Ola Electric's value reached 8000 crores. A 7.5% stake was left with Ola Cabs so that the "Ola" brand name could be used.

Before this acquisition, Ola Electric was a subsidiary of Ola Cabs, so technically all investors should have had a stake. However, shareholders received nothing, which may be legally correct but is questionable from an ethical perspective. If someone invests in Ola Electric today, how can they trust that such deals will not happen in the future, since Ola Electric still operates its verticals through five separate subsidiaries?

As an investor, I would rate this management 1/5.

About Ola Electric:

Ola Electric Mobility Private Limited generates its revenue primarily from the sale of scooters, vehicle accessories, spare parts for vehicle repairs, chargers, and related services.
It is one of the key players in India's electric vehicle (EV) industry and has highest market share of 40.1% as of December 2023.
Ola Future factory is India's largest automated E2W manufacturing plant with an installed capacity of one million units per year. Ola Electric plans to double its electric vehicle manufacturing capacity from one million units per annum to two million units per annum by May 2024.

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