SoftBank-backed Ola Electric’s shares surged about 20% on their first day of trading, hitting the upper circuit, despite a modest debut on India’s stock exchanges.
The stock, which listed at a flat Rs 76 per share, closed at Rs 91.2 on the National Stock Exchange (NSE), boosting the company’s valuation to about $4.8 billion—just below its last private market valuation of $5 billion. Ola Electric reduced its valuation to approximately $4.2 billion at the upper end of the IPO price band of Rs 76 per share to make the offering more attractive to public market investors.
Ola Electric, which became the country’s largest IPO so far this year, had seen relatively tepid demand for its shares in the grey market before today’s listing. The stock was trading at a discount of Rs 3-4 as of early morning today.
The grey market is an unofficial market where traders buy and sell shares or IPO applications of companies at a premium or discount before the issues are officially launched on public markets.
Ola Electric’s IPO, which constituted a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of 8.4 crore shares, was subscribed over 4 times with the institutional portion witnessing a last-minute surge on the final day and getting subscribed over 5 times.
The company, which has around 39% market share in the electric scooter space in India, competes with established players such as Bajaj Motors and HeroMotor Corp and IPO-bound Ather Energy.
Aggarwal, in a pre-IPO event in Bengaluru said that the company is banking on its rising volumes and in-house manufactured batteries to help reach profitability. However, he did not lay out any timeline for this path.
According to the red herring prospectus filed recently by the company, the EV-two-wheeler maker reported widening losses of Rs 1,584 crore for the year ended March 31, 2024, compared with a loss of Rs 1,472 crore for the previous year.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric.)
