Ola Electric IPO: Ola Electric Mobility Limited’s initial public offering (IPO) debuted on the Indian primary market on August 2, 2024, and will be ready for bids until August 6, 2024. The subscription status of Ola Electric’s IPO indicates that retail investors responded positively to the year’s most major public offering. The Ola Electric IPO pricing band is set at ₹72 to ₹76 per equity share.
The company’s maiden offer plans to raise ₹6,145.56 crore, with ₹5,500 crore allocated for new share issuance. The Offer for Sale (OFS) route is reserved for ₹645.56 crore. However, the premium for Ola Electric Mobility shares fell the following the day of bidding. Ola Electric’s share price currently trades at a premium of ₹9 in the gray market, according to stock market experts.
GMP for Ola Electric’s IPO today
Today’s Ola Electric IPO grey market premium (GMP) is ₹9, which is ₹7 lower than the GMP of ₹16 on Friday. Market analysts believe Ola Electric’s IPO GMP fell as a result of Friday’s stock market fall. They observed that weak global market cues caused strong selling in the Asian, European, and US stock markets in the prior week’s final session. However, the retail sector’s largest IPO of the year was fully subscribed. They stated that two days of bidding remain and that subscriptions to the public offer may begin on Monday next week.
Subscription Status for Ola Electric’s IPO
After the initial day of bidding, the public issue was subscribed 0.35 times overall, with the retail segment being covered 1.57 times and the NII portion reaching 0.20 times.
Ola Electric’s Initial Public Offering Review
The BP Equities report, which gives the public issue a ‘subscribe’ recommendation, notes, “With the positive outlook for the EV market, a favorable regulatory environment, the substantial size of the IPO, new model launches, and the upcoming cell manufacturing unit (Gigafactory), we are optimistic about the company’s medium- to long-term prospects. Hence, we advise subscribing to the issue.”
Anand Rathi has assigned a ‘subscribe’ rating to the public offering, stating, “At the upper end of the price band, the company is valued at a Marketcap/Sales ratio of 6.6x, with a market cap of ₹335,220 million post-issue. In comparison, leading global automakers trade between 1-8x market cap/sales. This indicates a high valuation for the company. Consequently, we recommend a ‘Subscribe – long term’ rating for the IPO, suitable for investors with a higher risk tolerance.”
Brokerages for Ola Electric IPO
As the Ola Electric IPO becomes available for public subscription, brokerages such as Geojit, LKP Securities, and the Anand Rathi Research Team have given their perspectives on the subject.
Geojit advised investors to subscribe to the Ola Electric IPO with a long-term view. At the upper price band of Rs 76, Geojit analysts believe OEML’s EV/sales ratio of 7.2x (FY24) is too high. “However, as a leader in the E2W category, the company is in a strong growth phase, with powerful R&D, a diverse product portfolio, and a vertically integrated strategy. Despite present profitability issues and valuation worries, we suggest a Subscribe rating for high-risk investors with a long-term view,” the brokerage stated.
Analysts at LKP Securities have also recommended subscribing to the IPO for a long-term view, noting, “Given the growing adoption of EVs in the country (with current EV scooter penetration at 15%), we expect Ola to benefit as the only dedicated two-wheeler EV player. Therefore, considering the cautious outlook on demand and loss mitigation for Ola, we advise subscribing to this IPO with a focus on long-term gains.”
The Anand Rathi Research Team recommended subscribing to the Ola Electric IPO for the long term, stating, “On the valuation front, we believe that the company is richly priced.” As a result, we recommend a ‘Subscribe – long term’ rating for the IPO with a higher risk tolerance.
Ola Electric’s IPO essential details
Ola Electric has appointed Link Intime India as the registrar for its public offering. The book-running lead managers for the issue include BofA Securities India, Goldman Sachs (India) Securities Private, Kotak Mahindra Capital Company, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, BoB Capital Markets, and ICICI Securities.
The basis of allotment for the Ola Electric IPO shares is planned to take place on Wednesday, August 7, 2024, with the company’s shares being credited to demat accounts on Thursday, August 8. Ola Electric shares are set to debut on the BSE and NSE on Friday, August 9, 2024.
About the Ola Electric Mobility Limited
Ola Electric, founded on February 3, 2017, is a pure EV player in India that is developing vertically integrated technology and production capabilities for EVs and EV components, such as cells.
Ola Electric’s revenue from operations increased to Rs 5,009.83 crore in fiscal year 2023-24 from Rs 2,690.92 crore in FY23. In FY24, the company’s EBITDA decreased to Rs 1,040.19 crore from Rs 1,197.09 crore in FY23. Meanwhile, Ola Electric’s loss increased to Rs 1,584.44 crore in FY24, according to RHP filings.
Read Also: Here are the top ten things investors interested in the Ola Electric IPO should know.
