Ola Cell Technologies Pvt Ltd (OCTPL), a wholly owned subsidiary of Ola Electric Mobility Ltd (OEML), is expected to incur a capital expenditure of over ₹2,000 crore this fiscal for its lithium-ion cell manufacturing expansion.
OCTPL, which is setting up a lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu for the Group, has invested about ₹1,200 crore as of September 2024 since the project’s inception, establishing a 1.4-GWh lithium-ion cell manufacturing capacity under Phase 1(a).
The cells produced at the plant have received BIS certification and are in the homologation phase with its electric vehicles. OCTPL aims to integrate its cells with electric two-wheelers by Q1 FY2026, with production expected to ramp up thereafter.
The company is also undertaking expansion phase 1 (b) where manufacturing capacity is being enhanced to 5 GWh from 1.4 gWh. The company plans to expand manufacturing capacity up to 20 GWh in future phases.
To support its expansion, the company has planned a capital expenditure of ₹2,200 crore in this fiscal, financed through a combination of debt and equity. Additionally, funds raised through the parent company’s IPO will help increase capacity to 6.4 Gwh, according to a report by ICRA, which has revised the company’s outlook from stable to negative, this reflects OEML’s updated outlook due to increased competition and a longer-than-expected path to profitability.
OCTPL has been granted benefits under the ACC-PLI scheme for its 20 GWh battery unit, making the company eligible for subsidies based on annual value addition percentages over five years starting in FY2025. While the company’s ability to meet the required production and domestic value addition targets is yet to be determined, the availability of substantial subsidies is expected to support the project’s return metrics over the medium term, it said.
OCTPL’s liquidity is expected to remain sufficient, backed by periodic fund infusions from its parent, OEML, and an undrawn term loan of approximately ₹1,288 crore as of September 2024. The company held unencumbered cash and liquid investments of around ₹1,335 crore As of September 30, 2024, supported by funds raised through a successful IPO by its parent entity, said the rating agency.
With strong medium- to long-term demand prospects for EVs, domestic auto OEMs and ancillaries are investing in developing a local vendor ecosystem. OCTPL is among the early entrants in lithium-ion cell manufacturing in India. As a captive cell manufacturer for the Ola Group, the company is positioned to benefit from India’s growing EV market, supported by government initiatives to accelerate EV adoption.