Ola Electric Mobility Limited announced that its Board of Directors has approved a strategic reallocation of Initial Public Offering proceeds worth ₹575 crores during a meeting held on March 18, 2026. The proposed variation requires shareholder approval and involves redistributing funds from research and development activities to organic growth initiatives and debt repayment, while also extending the timeline for utilization.

Board Meeting Outcomes

The board meeting, conducted from 05:00 PM to 05:30 PM IST, focused on modifying the utilization pattern of IPO proceeds while maintaining the overall fund allocation framework. The company raised a total of ₹5,500 crores through its public offering, with ₹1,295.63 crores remaining unutilized as of March 11, 2026. The board has also approved extending the time period for utilizing these proceeds to ensure optimal deployment.

IPO Proceeds Reallocation Details

The proposed variation involves reallocating ₹575 crores from Object 3 (Investment into research and product development) to two other strategic areas:

Revised Fund Allocation Structure

Following the proposed changes, the revised allocation across different objectives will be:

Extended Timeline and Regulatory Compliance

The company has established revised and extended timelines for fund utilization, with most objectives now targeted for completion during an extended timeframe beyond the original schedule. The reallocation maintains compliance with regulatory requirements, ensuring that general corporate purposes do not exceed 25% of gross IPO proceeds. This extension provides the company with additional flexibility to deploy funds strategically.

Next Steps and Shareholder Approval

Ola Electric Mobility will issue a notice seeking shareholder approval for the proposed variation in due course. The company has committed to providing detailed explanations in the attached explanatory statement when the notice is released. This marks the second variation in IPO proceeds utilization, following the first variation approved during the 8th Annual General Meeting held on August 22, 2025.

The strategic reallocation and timeline extension reflect the company's evolving business priorities while maintaining transparency with stakeholders and regulatory authorities. Chief Financial Officer Deepak Rastogi signed the regulatory filing from the company's Bengaluru office.

Ola Electric Mobility faces continued pressure from analysts as Citi maintains its Sell rating while reducing the target price significantly. The brokerage has cut its target price to ₹22 from the previous ₹27, reflecting growing concerns about the company's market position and financial trajectory.

Revenue Estimate Revisions

Citi has implemented substantial cuts to revenue estimates across multiple fiscal years, with reductions ranging from 5% to 14% for the FY26-28 period. The primary drivers behind these downward revisions include market share loss and slower-than-expected electric vehicle adoption in the Indian market.

Profitability and Cash Flow Concerns

The brokerage has expressed skepticism about the company's path to profitability, indicating that EBITDA break-even appears unlikely by FY28. This assessment reflects the challenging operating environment and competitive pressures facing the electric vehicle manufacturer. Additionally, Citi has highlighted concerns regarding weak cash generation capabilities, which could impact the company's financial flexibility and growth investments.

Valuation Assessment

Despite the challenges, Citi notes that Ola Electric's current valuation stands at approximately 3.5x FY27E EV/Sales, which represents about a 10% discount to industry peers. This valuation metric suggests that while the stock trades at a discount, the underlying operational challenges continue to weigh on the investment thesis.

The combination of market share erosion, slower EV adoption rates, and profitability concerns has led to the maintained Sell recommendation, indicating that Citi believes the current challenges outweigh the valuation discount relative to peers.