Ola Electric tweaks IPO use again; reallocates Rs 575 crore from R&D to debt, growth

Ola Electric is seeking to again revise the utilisation of its IPO proceeds, with its board approving a proposal to reallocate ₹575 crore originally earmarked for research and product development (R&D), while also extending the timeline for deployment of the funds to FY26-27.

Under the revised plan, ₹475 crore will be diverted towards debt repayment or prepayment, while the remaining ₹100 crore will be allocated to organic growth initiatives. This would reduce the total R&D allocation from ₹1,505 crore to ₹930 crore, even as the amount set aside for debt repayment rises from ₹395 crore to ₹870 crore. The proposal is subject to shareholder approval.

The company had raised ₹6,146 crore through its IPO, including ₹5,500 crore via fresh issue and ₹646 crore through an offer for sale. As per its draft red herring prospectus (DRHP), over ₹1,200 crore was earmarked for Gigafactory capacity expansion, ₹800 crore for debt repayment, ₹1,600 crore for R&D, and ₹350 crore for organic growth.

As of March 11, 2026, the company had ₹1,295.63 crore of unutilised IPO proceeds. The latest move marks the second major revision in under a year. In August 2025, it had already reduced its R&D allocation, introduced a debt repayment component, and increased the share for organic growth.

The revision comes amid declining EV sales and cashflow constraints. The company is also exploring a ₹2,000 crore fundraise through a minority stake sale in its battery arm, Ola Cell Technologies. The stake sale plans came after its attempt to raise ₹1,500 crore via a qualified institutional placement (QIP) and up to ₹1,700 crore through debt failed to attract investors.

Shares of the company fell 5.27% to close at ₹23.55 on the NSE, in line with a broader market decline, with the Nifty 50 ending 775.65 points lower at 23,002.15 amid escalating geopolitical tensions in West Asia.