Synopsis: Ola Electric's IPO, held from August 2 to August 6, raised ₹6,145.56 crore in a price band of ₹72-76 per share. Despite a muted market debut, Ola Electric's shares surged by 17%, propelling promoter Bhavish Aggarwal into India's billionaire club with a net worth of $1.44 billion.
Ola Electric Mobility Ltd's much-anticipated Initial Public Offering (IPO) ran from August 2 to August 6, 2024, and garnered significant attention from investors.
The IPO, priced in the band of ₹72-76 per share, raised a substantial ₹6,145.56 crore.
This amount included a fresh issue of ₹5,500 crore and an offer-for-sale (OFS) of up to 8,49,41,997 shares.
Despite the overall positive response, the company's stock had a muted debut, listing at ₹75.99 on the Bombay Stock Exchange (BSE), a negligible discount of 0.01% from its issue price.
The IPO was oversubscribed 4.27 times, with Qualified Institutional Bidders (QIBs) showing the most interest, subscribing their portion 5.31 times.
Non-institutional investors subscribed 2.40 times, while the retail investor quota saw 3.92 times subscription.
The employee portion was the most oversubscribed, at 11.99 times, reflecting strong internal confidence in the company’s future.
Bhavish Aggarwal joins the "Billionaire Club":
Ola Electric's stock rallying 17% post-listing had a significant impact on its promoter, Bhavish Aggarwal. Pre-IPO, Aggarwal held a 36.94% stake in the company, equating to 1,36,18,75,240 shares.
With the share price surge, his stake was valued at ₹12,104 crore or $1.44 billion, earning him a spot in India's billionaire club.
Aggarwal, aged 38, sold 37,915,211 shares in the OFS at ₹76 each, amounting to ₹288 crore.
Post-IPO, he retained 1,32,39,60,029 shares, worth ₹11,816 crore at the intraday high of ₹89.25 per share on Friday.
Market Sentiment and Financial Outlook:
Despite the initial muted response, analysts like Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., highlighted that the listing surpassed street expectations, given the weaker financial outlook and potential for negative cash flows in the near future.
Tapse cautioned investors to be aware of the risks that could adversely impact Ola Electric's consolidated financial condition post-listing.
He advised only risk-taking investors to hold their positions, with a recommended holding period of 2-3 years.
Ola Electric Mobility, founded in 2017 and headquartered in Bengaluru, is a pioneer in the electric vehicle (EV) space in India.
The company manufactures electric vehicles and core components such as battery packs, motors, and vehicle frames at its state-of-the-art Ola Futurefactory.
In conclusion, Ola Electric's IPO marks a significant milestone for the company and its promoter, Bhavish Aggarwal.
While the stock’s initial performance was mixed, the subsequent rally indicates strong investor confidence in the company's long-term potential.
However, investors should approach with caution, given the company's current financial challenges and the inherent risks in the rapidly evolving EV market.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
