Ola Electric, an Indian Electric Vehicle unit of ANI Technologies Pvt. Ltd., is raising US $100 Mn. from the Public Sector Undertaking, Bank of Baroda (BOB). This is termed the largest long-term debt financing agreement in the Indian EV industry.
The reason behind this debt is to partially finance the first phase of construction of the world’s largest electric two-wheeler factory. In December 2020, The Bengaluru-based company had announced that it would be investing Rs. 2,400 Cr. to set up Phase 1 of the factory situated in Krishnagiri District of Tamil Nadu.
The Bhavish Agarwal-led company last raised the debt fund in late 2019, when Korean carmakers Kia Motors Corp and Hyundai Motor Company had invested approx. $300 million in Ola and Ola electric.
“Today’s agreement for long-term debt financing between Ola and Bank of Baroda signals the confidence of the institutional lenders in our plans to build the world’s largest two-wheeler factory in record time,” said Bhavish Aggarwal, Chairman & Group CEO of Ola.
The Bengaluru-based company last raised the debt fund in late 2019, when Korean carmakers Kia Motors Corp and Hyundai Motor Company had invested approx. $300 million in Ola and Ola Electric.
As per the sources, Ola Electric is planning to raise funds from a large equity round, which is led by Temasek and likely to invest US $ 120-150 Mn. Temasek is a Singapore-based Investment company, which is also named as one of the investors in Ola. It had also participated in the ride-hailing company’s US $500 Mn. financing round.
As per Arun Kumar, Ola Group’s CFO GR, the production facility will start delivering the E-scooter in August onwards. The electric wing of the company has also affirmed to have a capacity of manufacturing of 10 Mn. electric vehicles annually.
Ola Electric is the first start-up to turn into a unicorn in the electric vehicle segment. The company made an entry into the manufacture of electric two-wheelers with the acquisition of Amsterdam-based electric scooter manufacturer Etergo in May 2020.