Ola Electrics share price experienced a subdued debut on the Indian stock market today, August 9. The stock listed flat compared to its issue price, with shares debuting at ₹76 each on the NSE and ₹75.99 each on the BSE, marking a slight discount of 0.01%. This muted opening contrasts with the high expectations that surrounded the IPO, reflecting a tepid reception from the market.
The company’s IPO was met with a moderate subscription rate of 4.27 times on the final day of bidding. The issue received bids totaling 198.79 crore equity shares compared to the 46.51 crore shares available, with significant interest from Qualified Institutional Buyers (QIBs). Despite the IPO’s overall oversubscription, the flat listing price suggests a lukewarm investor response.
Ola Electrics Share Subscription Details
The IPO was segmented into different categories, with varying levels of interest. Retail Individual Investors (RIIs) subscribed 3.92 times their allocated portion, while the Non-Institutional Investors (NIIs) portion was subscribed 2.40 times. The Qualified Institutional Buyers (QIBs) portion saw the highest subscription rate, at 5.31 times. This diverse investor interest highlights the varying levels of enthusiasm for Ola Electric’s shares.
The IPO, which opened for retail subscription on August 2 and closed on August 6, included a fresh issue of shares worth ₹5,500 crore and an Offer for Sale (OFS) of 8.49 crore shares. According to the Draft Red Herring Prospectus (DRHP) filed in December last year, the company intended to sell up to 9.51 crore shares through the OFS. The price band for the IPO was set between ₹72 and ₹76 per share, with the company aiming to raise over ₹6,145.6 crore at the upper end of this range.
The IPO’s grey market premium (GMP) was negative, recorded at -4% prior to listing, which reflects some skepticism among investors. Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, noted that despite Ola Electric’s ambitious plans and technological advancements, the negative GMP indicates a challenging market sentiment. Nyati remarked, “Ola Electric’s goal of becoming a global leader in electric vehicles is impressive. However, the company’s ongoing financial losses, coupled with intense competition, pricing pressures, and employee turnover, pose significant concerns. Although the company’s foray into the broader EV ecosystem, including battery production, offers potential, its path to profitability remains uncertain.”
About Ola Electric Mobility
Ola Electric is a significant player in India’s electric vehicle (EV) sector, focusing on vertically integrated technology and manufacturing capabilities. The company produces a range of EVs and core components such as battery packs, motors, and vehicle frames at the Ola Futurefactory. Ola Electric’s strategic emphasis on EV technology and manufacturing aims to position it as a key player in the global electric vehicle market.
Financially, Ola Electric’s performance has been marked by substantial growth in revenue but also significant losses. The company’s revenue surged from ₹456.2 crore in FY22 to ₹5,243.2 crore in FY24. Despite this impressive revenue growth, Ola Electric’s net loss increased substantially from ₹784.14 crore to ₹1,584.4 crore over the same period. This widening loss underscores the financial challenges the company faces as it scales its operations and invests in expanding its EV technology and manufacturing capabilities.
Overall, while Ola Electric’s IPO has garnered substantial attention and interest from institutional investors, the flat debut and mixed market sentiment reflect ongoing challenges for the company as it navigates its growth trajectory in a competitive and evolving industry.
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