Ola Electric has raised $100 million in debt to start producing its electric scooters soon

Ola Electric has raised $100 million in debt to start producing its electric scooters soon
Ola
  • Ola Electric has raised $100 million of debt from Bank of Baroda.
  • This is termed as the largest long-term debt financing agreement in Indian EV industry.
  • The debt will be used towards funding and financial closure of the Phase 1 of Ola Futurefactory.
Ola Electric, the electric vehicles (EV) focused arm of ride hailing giant Ola, has raised $100 million (about ₹ 744 crore at current conversion rate) of debt from the Bank of Baroda.

Ola and Ola Electric are two separate businesses under ANI Technologies. Ola focuses on ride hailing business, whereas Ola Electric will be looking to enter electric scooter manufacturing and selling.

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Last year, Ola Electric had announced that it will be investing ₹2,400 crore ($322 million, at current conversion rate) in setting up its first electric two-wheeler factory in Tamil Nadu. The factory will spread across 500-acres and the company hopes to make 10 million vehicles annually. The company aims to manufacture 15% of the world’s e-scooters by summer of 2022 and will also be looking to export these scooters.

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While Ola was laying off 1,400 employees in May 2020 due to 96% drop in revenue, Ola Electric had gone ahead to acquire Amsterdam-based electric scooter company Etergo BV to launch its own line of scooters.

Ola Electric’s EV manufacturing plant is said to be the largest in the world. ANI Technologies’ chief executive Bhavish Aggarwal announced, last month, that Ola Electric’s scooter factory is nearing completion and the company expects to start rolling out vehicles soon.

The latest 10-year debt of $100 million will be used towards funding and financial closure of the Phase 1 of Ola Futurefactory, the company’s manufacturing unit for electric two-wheelers. The deal signed between Ola Electric and Bank of Baroda on Monday (July 12) is the largest long-term debt financing agreement in the Indian EV segment, the e-mobility firm said.

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“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,” Aggarwal said.

The development comes only a few days after ride hailing giant Ola raised $500 million from Temasek and Warburg Pincus, ahead of its initial public offering (IPO). The company’s chief executive and cofounder Aggarwal also infused an undisclosed amount in the round.

Notably, Ola Electric was founded in 2017 and entered the unicorn club in 2019, becoming the fastest Indian unicorn. It has raised about $307 million to date from some of the leading investors like Tiger Global Management, SoftBank, Tata Sons, Matrix Partners, Hyundai Motor and its subsidiary Kia Motors. A unicorn is a private company valued at or more than $1 billion.

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