New Delhi: Ola Electric Mobility has approved a rights issue of partly paid-up equity shares to raise up to Rs 1,000 crore, as the electric two-wheeler manufacturer looks to strengthen its finances and fund further business expansion.

The company’s board approved the fundraising proposal at a meeting on September 28, according to a regulatory filing. The issue will be offered to eligible shareholders, while key details such as the record date, issue price, entitlement ratio, issue period and payment terms will be finalised subsequently. The fundraising will also be subject to applicable regulatory and statutory requirements.

The rights issue comes only months after Ola Electric raised Rs 780 crore through a qualified institutional placement (QIP) in June 2026.

Bhavish Aggarwal to participate in rights issue

Ola Electric founder and Chairman and Managing Director Bhavish Aggarwal has confirmed that he will subscribe to his rights entitlement under the proposed issue.

According to the company’s Draft Letter of Offer, any renunciation of Aggarwal’s rights entitlement will be restricted to members of the promoter group or specified investors.

The promoter group collectively holds around 32.97 per cent of Ola Electric. Sources tracking the development have said Aggarwal may fund his participation by pledging part of his existing shareholding.

The potential participation by the founder comes as the company seeks additional capital for debt reduction and organic growth.

While the exact amount Aggarwal will invest will depend on the final terms of the rights issue, his commitment allows him to participate alongside other eligible shareholders.

Rs 350 crore earmarked for debt repayment

The proposed rights issue is expected to have two major financial objectives: reducing debt and funding the company’s organic growth.

According to the Draft Letter of Offer, approximately Rs 350 crore of the proceeds will be used to repay debt.

Another Rs 400 crore will be allocated towards organic growth, while the remaining funds will be used for general corporate purposes.

The planned debt repayment is significant for Ola Electric as the company continues to invest in its electric vehicle business and manufacturing operations.

A banking source cited in reports said the reduction in debt could ease pressure on operating expenses and help the company move towards cash breakeven without depending on additional external capital in the near term.

Retail investors can participate

Ola Electric had said the rights issue route was chosen to allow existing shareholders, including retail investors, to participate in the fundraising.

Unlike a qualified institutional placement, which is targeted at institutional investors, a rights issue gives eligible existing shareholders an opportunity to subscribe to additional shares based on their entitlement.

The company had previously received approval to raise up to Rs 1,500 crore through equity shares and other securities. It subsequently raised Rs 780 crore through the June QIP before deciding to pursue the rights issue for the next stage of fundraising.

The final size of the rights issue is capped at Rs 1,000 crore, with the precise terms yet to be announced.

Final issue terms are still pending

Although the board has approved the fundraising, investors will have to wait for further details before the rights issue can proceed.

The company has not yet finalised the record date, issue price, number of shares to be issued, entitlement ratio, issue period or payment schedule.

Eligible shareholders will be determined based on the record date once it is announced.

Ola Electric’s latest exchange disclosures indicate that a further board meeting is scheduled for October 5, 2026, or after the company receives the required in-principle approval from the stock exchanges or other applicable regulatory authorities, to consider and approve various matters related to the rights issue.

Fundraising comes amid business expansion

The latest capital raise comes as Ola Electric continues to invest in its electric vehicle operations.

The Bengaluru-based company is expanding its manufacturing capabilities while working to strengthen its position in India’s electric two-wheeler market.

The company’s business includes electric scooters as well as its battery-cell manufacturing operations. The cell business requires substantial capital as the company works to scale production.

At the same time, Ola Electric has been working towards improving the operating economics of its automotive business.

Business Standard reported that the company’s auto business was approaching cash breakeven, while its cell manufacturing operations remained at an earlier stage of development and would require further investment to scale.

Rights issue follows Rs 780 crore QIP

Ola Electric raised Rs 780 crore through a QIP in June 2026, exceeding its initial target of Rs 500 crore, according to reports.

The latest rights issue therefore represents another significant capital-raising exercise within the same financial year.

The company had initially received board approval to mobilise as much as Rs 1,500 crore, with the QIP forming part of that broader fundraising plan.

The decision to use a rights issue for the remaining capital allows the existing shareholder base to participate, including retail investors and the promoter group.

Investor focus turns to debt and cash flow

The proposed allocation of Rs 350 crore towards debt repayment indicates that strengthening the company’s balance sheet is an important part of the fundraising plan.

The Rs 400 crore allocation for organic growth, meanwhile, will provide additional funds for the company’s ongoing business requirements.

For investors, the final terms of the rights issue will be closely watched, particularly the issue price, entitlement ratio and the extent of promoter participation.

The company’s ability to use the fresh capital to reduce financial pressure while continuing its expansion will also remain an important consideration as Ola Electric works towards cash breakeven.

Ola Electric prepares for next stage

The Rs 1,000 crore rights issue marks another significant financing step for Ola Electric following its Rs 780 crore QIP earlier this year.

With founder Bhavish Aggarwal confirming his intention to participate, the promoter group is set to remain involved in the fundraising alongside other eligible shareholders.

The proceeds are earmarked primarily for debt repayment and organic growth, while further details of the issue are expected after the company completes the necessary regulatory and procedural steps.

As Ola Electric continues to expand its electric vehicle and battery businesses, the success of the rights issue and the deployment of the proceeds will be important to its efforts to strengthen finances and move towards cash breakeven.