The Ola Electric Mobility IPO reached full subscription by the second day of bidding. The employee segment saw the highest subscription rate at 8.98 times. The retail investor segment was subscribed 2.87 times, while the non-institutional investor segment reached 1.11 times subscription. The portion allocated for qualified institutional buyers (QIBs) achieved 40% subscription.
According to BSE records, bids were received for 49,43,63,610 shares in the initial share sale, whereas 46,51,59,451 shares were offered. This corresponds to a 1.06 times subscription.
On Friday, August 2, 35% of Ola Electric Mobility’s ₹6,145 crore initial share offer was subscribed, indicating a mediocre level of investor interest.
The offering price range for equity shares with a face value of ₹10 is between ₹72 and ₹76. Anchor investors contributed ₹2,763 crore to the business before the IPO subscription period, which began on Friday, August 2, and ended today (Tuesday, August 6).
The Ola Electric IPO has reserved 75% of its shares for qualified institutional buyers (QIBs), 15% for non-institutional institutional investors (NIIs), and 10% for retail buyers.
Ola Electric manufactures electric vehicles (EVs), as well as crucial EV components such as motors, battery packs, and vehicle chassis. Its business goal is to capitalize on India’s electrification of transportation and, in the future, export its EVs to a few other countries. It began shipping the Ola S1 Pro, its first electric vehicle, in December 2021. Following that, the Ola S1 Air, Ola S1 X+, and Ola S1 S1 all arrived in September 2022.
IPO Review for Ola Electric
The LKP Securities
According to the brokerage, the company received a Production Linked Incentive (PLI) for both its battery manufacturing plant and some of its best-selling models. This will enhance Ola’s profitability in the next years. In addition to EV bike launches next year, a slew of new product releases should help the company maintain its market share (45% at the end of Q1 compared to 39% at the end of Q4). Higher volumes, they think, will result in operating leverage and a reduction in losses over time. Reduced battery costs should also help the cause.
Because Ola is the first pure-play 2W EV, they believe it will set the standard for EV proliferation in the country. Thus, with a long-term perspective, the brokerage urges investors to SUBSCRIBE to this IPO while keeping a close check on demand and, subsequently, Ola’s losses.
Choice Equity Broking Pvt Limited
According to the brokerage, Ola Electric’s aggressive expansion goals are reflected in the significant capital expenditures made in its early years, as well as the substantial capital outlay projected for the medium term. We believe the suggested price is reasonable considering the company’s sustained dominance in the E2W industry, the benefits of backward projects such as cell manufacturing, and its widespread use in energy storage applications.
The company’s main worries are its loss-making operations and reliance on government subsidies to boost sales. If the existing EMPS scheme is not extended until September 2024, operating leverage will not be activated, sustaining the profitability gap. Thus, we grade the issue as “Subscribe with Caution.”
Ola Electric IPO information
This includes an offer for sale (OFS) of 8.49 crore equity shares by investors and promoters, together with a fresh issuance of up to ₹5,500 crore. Bhavish Aggarwal, founder of Ola Electric, will sell around 3.8 crore shares through the OFS.
The company intends to pay down OET’s debt, support organic growth activities, conduct research and product development, and use the net proceeds for general corporate purposes. Its subsidiary OCT will need to spend capital money to enhance the plant’s capacity from 5 GWh to 6.4 GWh, which is considered phase 2 of the development plan.
Ola Electric’s IPO GMP today
Today’s GMP for the Ola Electric Mobility IPO, or grey market premium, is +2.50. Investorgain.com reports that Ola Electric shares were trading at a premium of ₹2.50 in the gray market.
Ola Electric’s share price is expected to be listed at ₹78.5 per share, 3.29% more than the IPO price of ₹76, taking into account the upper end of the IPO pricing band and the current gray market premium.
The ‘grey market premium’ shows that investors are willing to pay more than the issue price.
Read Also: Ola Electric IPO Day 2: Review GMP and subscription status. Should you consider applying?
