Ola Electric is exploring a fresh capital raise through the partial stake sale of its battery subsidiary Ola Cell Technologies (OCT), according to people familiar with the development. The proposed transaction could raise as much as Rs 2000 crore and is expected to involve the sale of a minority stake to financial investors.

The fundraising initiative comes at a strategically sensitive time for the Bengaluru based electric vehicle manufacturer. Over the past year, the company has been facing operational challenges including declining sales momentum in the electric two wheeler market and increasing competition from both EV focused startups and traditional automotive manufacturers entering the segment.

Investment banks Avendus and Motilal Oswal have reportedly been mandated to manage the fundraising process. While neither Ola Electric nor the advisors have commented on the development, discussions are understood to be underway with potential investors including large financial institutions and sovereign wealth funds.

At the centre of the fundraising plan is Ola Cell Technologies, the company’s battery manufacturing arm. OCT operates India’s first gigafactory dedicated to lithium ion cell production in Krishnagiri, Tamil Nadu. The facility currently has an operational capacity of about 1.5 GWh and the company plans to expand this capacity to 6 GWh by the end of the current financial year.

The gigafactory represents one of Ola Electric’s most ambitious bets. With an initial investment of around Rs 3500 crore, the project was designed to localise battery cell manufacturing in India. The country currently relies heavily on imported lithium ion cells, largely sourced from China, South Korea and Japan. Developing domestic manufacturing capabilities has therefore become a key policy objective as India attempts to build a self reliant electric mobility ecosystem.

Through OCT, Ola aims to integrate battery technology into its broader energy storage and electric mobility platform. The battery arm also houses the company’s Battery Innovation Centre, a research hub employing more than 200 scientists and researchers. The centre has developed a portfolio of roughly 400 patents spanning different battery chemistries including NMC, LFP, LMFP and LMR, as well as multiple form factors such as cylindrical and prismatic cells.

In addition, the company has developed a dry electrode manufacturing technology, which is considered an advanced innovation in lithium ion battery production. Using this technology, Ola has developed the so called Bharat Cell in the 4680 format, which is already being commercially produced at the Krishnagiri gigafactory and deployed in its electric scooters.

The company is also among the beneficiaries of the Indian government’s Advanced Chemistry Cell Production Linked Incentive scheme, under which it has secured an allocation of 20 GWh manufacturing capacity. The policy initiative is intended to accelerate domestic battery manufacturing and reduce reliance on imported energy storage components.

Despite these long term ambitions, Ola Electric’s core electric two wheeler business has faced mounting pressure in fiscal 2026. Sales growth slowed considerably as rivals such as Ather Energy gained traction while established automotive players like TVS Motor and Bajaj Auto expanded their electric scooter offerings.

Industry analysts have also highlighted operational challenges within the company. Recent brokerage assessments suggest that strengthening service infrastructure, stabilising leadership teams and improving product reliability will be critical for restoring consumer confidence.

Earlier this year, Ola Electric announced that it would lay off around five percent of its workforce as part of an organisational restructuring programme. The company described the move as part of a broader push toward automation and operational discipline, with the aim of building a leaner and more efficient operating structure.

Against this backdrop, the potential stake sale in OCT serves multiple objectives. In addition to raising capital, the transaction could unlock value from one of Ola’s most strategically significant assets. It would also establish a market benchmark valuation for the battery unit, which currently sits within the broader Ola Electric ecosystem without a publicly visible valuation reference.

From a sector perspective, the development underscores the increasing strategic importance of battery manufacturing in the electric vehicle value chain. Battery cells account for a significant portion of EV costs, and domestic production capacity is seen as a critical factor in reducing costs and securing supply chains.