NEW DELHI: The much-anticipated initial public offering (IPO) of Ola Electric was subscribed 4.26 times on the final day of bidding, receiving bids for 198.16 crore equity shares against 46.52 crore on offer. The low subscription level came despite the leading electric two-wheeler company’s valuation eased to about $4 billion ahead of the Rs 6,145 crore IPO.
Categories-wise, the heavy lifting was done by qualified institutional buyers (QIBs) and retail investors as their portion was subscribed 5.31 times and 3.86 times the allotted quota, respectively. The non-institutional investors (high networth individuals) bid 2.39 times the portion set aside for them. The portion set aside for employees was subscribed 11.66 times against the reserved portion.
Owing to low enthusiasm and rising volatility in the broader market, the grey market premium (GMP) of Ola Electric has fallen sharply in recent times, indicating a not-so-buoyant listing gain. Last checked, Ola Electric was commanding no premium in the unofficial market.
Brokerage firms and analysts too have mixed views on the IPO as they expect Ola Electric to incur losses. They are also not satisfied with the $4 billion valuation. The Bengaluru-based reported a net loss of Rs 1,584.40 crore with a revenue of Rs 5,243.27 crore for the financial year ended on March 31, 2024.
Ola Electric is demanding an EV/sales multiple of 6.3 times, which is at a significant premium, said Choice Broking in a note. It added that key concern for the company is its reliance on government subsidies for generating sales and its loss-making operations.