Ola Electric Mobility surged 20% during its market debut on Friday, valuing the nation's largest electric two-wheeler (E2W) manufacturer at Rs 40,218 crore ($4.8 billion), despite a lackluster response to its Rs 6,146-crore maiden share offer. The shares of the Bhavish Aggarwal-led company closed at Rs 91.2 on the NSE, up Rs 15.2 or 20% from its issue price of Rs 76. Shares worth Rs 4,426 crore were exchanged.
The stock hit its 20% higher trading limit with just buyers and no sellers present at the counter after starting at Rs 76. The sharp increase in the stock price of the SoftBank-backed business suggests that investors are placing bets on a long-term, steady transition in India, the largest market in the world, from gasoline two-wheelers to electric two-wheelers.
The largest IPO in more than two years, Ola's, only attracted 4.3 times subscriptions, as some investors shied away from the E2W maker that hasn't yet turned a profit despite this week's market selloff brought on by worries about a US recession. Aggarwal, who is only 38 years old, has seen his net worth reach $1.5 billion since Ola's IPO, solidifying his position as one of the world's youngest billionaires.
Based on FY24 revenues of about Rs 5,000 crore, Ola's present valuation is eight times its sales. Analysts note that listed competitors TVS Motor, Eicher Motors, Bajaj Auto, and Hero MotoCorp—all of which primarily operate in the gasoline two-wheeler market—now trade between three and eight times sales.
With 35% of all E2W registrations in FY24, Ola is the biggest E2W vendor in India in terms of units sold. OLA is seen to have an advantage over rivals should the industry go toward electric cars, which are predicted to be the way of the future for transportation.
Redseer projects that by FY28, E2W penetration in India would rise from 5.4% of domestic two-wheeler registrations in FY24 to 41–56% of domestic two-wheeler sales volume. TheBased on FY24 revenues of about Rs 5,000 crore, Ola's present valuation is eight times its sales. Analysts note that listed competitors TVS Motor, Eicher Motors, Bajaj Auto, and Hero MotoCorp - all of which primarily operate in the gasoline two-wheeler market - now trade between three and eight times sales.
