IPO-bound Ola Electric has become the first Indian e2W (electric two-wheeler) company to become eligible for the government’s production-linked incentive (PLI) scheme.
The Ministry of Heavy Industries (MHI) has given its approval after a four-month-long process.
While there has been no official confirmation from either the government or Ola Electric, it is worth noting that other major players like Hero MotoCorp, TVS Motor Company, and Bajaj Auto have also applied for the PLI scheme.
As per Moneycontrol’s report, citing an official close to the matter, Ola Electric has successfully met the scheme’s eligibility criteria, such as minimum 50% domestic value addition in its vehicles.
“For e2W startups, fresh investment of Rs 1,000 crore is required to avail of the PLI scheme, while OEMs must have a minimum revenue of Rs 10,000 crore,” the source further added.
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Meanwhile, industry experts are of the view that the incentive payout under the PLI scheme will be up to 18% of the sales value.
The electric scooter maker has already filed a red herring prospectus with the markets regulator Securities and Exchange Board of India (SEBI) for an INR 7,250 Cr initial public offering (IPO). According to media reports, in total, the public issue will comprise an OFS component of up to 9.5.1 Cr shares.
Last year, the company, along with Reliance New Energy Ltd and Rajesh Exports, signed a contract with the MHI under the PLI scheme for the manufacturing of advanced cell chemistry (ACC) battery manufacturing.
Back then, the government said that as a part of the contract, the companies would receive incentives under the INR 18,100 Cr PLI scheme. In addition, the government the expectations that three companies would set up a manufacturing capacity of around 95 GWh to be set up by these companies.
Earlier this year, the company announced that it had already started the construction of the country’s biggest gigafactory in Tamil Nadu. Ola Electric reported that during FY23, its sales were at INR 2,630.9 Cr, a 605%, an increase from INR 373 Cr in FY22.
