MUMBAI: Ola Electric made a silent debut on the exchanges with its shares getting listed at par against its issue price of Rs 76 on the BSE. However, post-listing, it witnessed strong buying and hit a 20% upper circuit limit on Friday.
The stock ended the session at Rs 91.19 apiece and its market capitalisation surpassed the Rs 40,000 crore mark. The listing and surge in share prices doubled founder Bhavish Aggarwal’s fortune. According to the Bloomberg Billionaires Index, the 38-year-old entrepreneur added $1.5 billion to his wealth on Friday, taking his net worth to $2.7 billion.
The shares defied the negative premium it was commanding in the unofficial premium market. Ahead of the listing, Ola Electric shares on Thursday were trading at a discount of ₹3 in the unlisted market.
“Ola Electric had a strong market debut, defying grey market expectations of a 4-5% discount. The positive performance is attributed to its healthy long-term outlook, 38% market share, benefits from the PLI scheme, and advantages of vertical integration,” said Vinod Nair, Head of Research, Geojit Financial Services.
Commenting on the listing, Shivani Nyati, Head of Wealth, Swastika Investmart, the flat listing performance, coupled with a mere 4.45 times subscription, underscores the challenges the company faces in gaining investor confidence.
“While Ola Electric's vision for the EV market is ambitious, the company's current financial performance, marked by consistent losses, and the highly competitive landscape have tempered investor enthusiasm. The negative grey market sentiment prior to listing further reflected these concerns, she explained.
"The flat listing highlights the need for Ola Electric to demonstrate a clear path to profitability and navigate the complexities of the EV market effectively. Investors are suggested to exit and book a minor profit, but those who want to take risks may hold their position by keeping a stop loss below 70,” added Nyati.
The much anticipated initial public offering (IPO) of Ola Electric was subscribed about 4.5 times, receiving bids for 198.16 crore equity shares against 46.52 crore shares 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.
For Ola Electric, the IPO provides the much-needed impetus to invest in enhancing cell manufacturing capacity and research and development on future technologies and products.
According to its prospectus, the company plans to utilise Rs 1,227.6 crore on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh. The company is also looking to use Rs 1,600 crore from the fresh fund on research and product development, another Rs 800 crore will be deployed to repay debts and Rs 350 crore for organic growth initiatives.
