Ola Electric IPO: Public Issue Subscribed 3.5x On Final Day; GMP Hints Lukewarm Listing; Check Dates

Ola Electric Mobility's initial public offering (IPO) has witnessed a healthy from investors, with the issue being subscribed 3.50 times as of the third and final day of the bidding process. The strong demand was evident as the IPO was fully subscribed by the end of the second day.

As of 2:42 pm on the final day, retail investors led the charge, with their portion subscribed 3.67 times. Non-institutional investors followed closely, with their segment receiving 2.14 times subscription. The allocation for qualified institutional buyers (QIBs) saw interest, being booked 4.10 times. Notably, the portion set aside for employees was a standout, being oversubscribed by 11.07 times.

According to data from the exchanges, investors had placed bids for 1,62,96,07,980 equity shares by 2:42 pm on Tuesday, August 6, against the 46,51,59,451 equity shares offered for subscription. The three-day bidding window for the IPO will conclude today.

In the grey market, shares of Ola Electric Mobility are trading with a premium of just Rs 2.50 per share. The grey market premium (GMP) has seen a decline due to increasing volatility in the broader markets. It's crucial to note that GMP is merely an indicator of investor sentiment in the unlisted market and can fluctuate rapidly.

Under the leadership of Bhavish Aggarwal, Ola Electric is offering its IPO shares within a price band of Rs 72-76 apiece, with one lot consisting of 195 shares. The company aims to raise Rs 6,146 crore through the IPO, which includes a fresh share sale of Rs 5,500 crore and an offer-for-sale (OFS) of 8.49 crore equity shares. Prominent selling shareholders include Bhavish Aggarwal, SoftBank, Temasek, and Matrix Partners India.

The company has earmarked Rs 1,600 crore of the net proceeds for investment in research and development (R&D). However, the company has cautioned in its risk factors that there are no guarantees these investments will yield tangible assets or anticipated results.

Ola Electric stands as a pure electric vehicle (EV) play in India, boasting integrated technology and manufacturing capabilities for EVs and their components. The company has delivered seven products and announced four new ones, leveraging an omnichannel distribution network. As of March 31, 2024, Ola Electric operates 870 experience centers and 431 service centers, along with its website.

Ola Electric has been loss-making. In the financial year 2024, the company reported a loss of Rs 1,584 crore, an increase from the Rs 1,472 crore loss in the financial year 2023.

The IPO is being managed by a consortium of leading financial institutions, including Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets, and BOB Capital Markets. The allotment for the IPO is expected to be finalized by tomorrow, with the company's equity shares set to list on BSE and NSE, tentatively on August 9.

The subscription figures and the high interest from various investor categories show market's confidence in Ola Electric Mobility. The company's focus on R&D and its extensive distribution network position it well for growth in the burgeoning EV market. However, the challenges highlighted in its financial performance and risk factors remind investors to weigh the potential risks alongside the opportunities.