Ola Electric Shuffles IPO Proceeds Again, ₹575 Cr Diverted from R&D

In a communication to stock exchanges on Wednesday, the company said its Board approved a proposed variation in the use of IPO funds, subject to shareholder approval.

According to the company, ₹100 crore of the reallocated funds will be directed toward organic growth initiatives, while ₹475 crore will be used for debt repayment or prepayment.

As a result, the total allocation for R&D will be reduced from ₹1,505 crore to ₹930 crore, while the allocation for debt repayment will increase significantly from ₹395 crore to ₹870 crore. As of March 11, 2026, the company had ₹1,295.63 crore in unutilised IPO proceeds.

This marks the second major revision in the use of IPO funds within a year. In August 2025, Ola Electric had already reduced its R&D allocation, introduced a debt repayment component, and increased spending toward organic growth. The latest move further underscores a shift in focus toward balance sheet strengthening and near-term financial priorities.

Ola Electric Financial Performance

The decision comes amid weak financial performance in the third quarter of FY26. Ola Electric reported consolidated revenue of ₹470 crore, reflecting a sharp decline of 31.9% from ₹690 crore in the previous quarter and a 55% drop from ₹1,045 crore in the same period last year.

The company posted a net loss of ₹487 crore, while its adjusted operating EBITDA loss widened 25% quarter-on-quarter to ₹323 crore. The EBITDA margin deteriorated significantly to negative 68.7%, compared with negative 37.4% in the previous quarter.

Consolidated gross margin rose to 34.3%, up from 30.9% in Q2 and 18.6% a year earlier, supported by its vertically integrated manufacturing model and improved unit economics from its Gen 3 platform. Total operating expenses increased marginally by 3.8% sequentially to ₹432 crore but declined 34% on a year-on-year basis.