Ola Electric’s IPO Journey Begins with a Measured Response

The much-anticipated initial public offering (IPO) of Ola Electric Mobility, the electric two-wheeler manufacturer, opened for subscription on Friday, August 2nd. By the end of the first day, the IPO had garnered a subscription rate of 35%. The offering, valued at a substantial INR 6,145.56 crore, includes a fresh issue of equity shares up to INR 5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares by promoters and investors, with the latter amounting to INR 645.56 crore at the upper end of the price band.

Investor Participation and IPO Structure

Retail investors emerged as the most active participants, oversubscribing their designated portion by 1.6 times. The total number of bids received on the first day reached 16.3 crore shares, against the total 46.5 crore shares available for subscription. Non-institutional investors also showed interest, with their quota reaching a 20% subscription rate. However, the portion reserved for qualified institutional bidders (QIBs) saw minimal activity.

The IPO’s price band is set at INR 72-76 per share, and investors can bid for a minimum of 195 equity shares per lot and multiples thereof. Notably, Hyundai Motor Company holds a 2.9% stake in Ola Electric Mobility, which equates to 108.8 million equity shares and is estimated to be worth $99 million at the upper price limit.

Capital Infusion and Future Outlook

The IPO, which remains open for subscription until August 6th, aims to inject significant capital into Ola Electric. This infusion is expected to fuel the company’s ambitious plans to expand its cell manufacturing capacity and accelerate research and development efforts in emerging technologies. The success of the IPO will be a crucial determinant of Ola Electric’s ability to strengthen its position in the burgeoning electric vehicle market.

Overall, the first day of Ola Electric’s IPO witnessed a moderate response from investors. The coming days will reveal the final subscription figures and determine the overall success of the IPO, setting the stage for Ola Electric’s future growth trajectory.