Ola Electric's initial public offering begins today. Despite good market sentiments, shares of Bhavish Aggarwal-led Ola Electric Mobility debuted poorly on the stock exchanges. Ola Electric's IPO shares were flat at Rs 75.99 on the BSE and Rs 76 on the NSE, compared to the issue price of Rs 76.
According to Shivani Nyati, Head of Wealth at Swastika Investmart, this flat performance, along with a measly 4.45 times subscription, highlights the company's difficulty in earning investor confidence. While Ola Electric's ambition for the EV industry is ambitious, Nyati feels the company's actual financial performance, which includes persistent losses, and the extremely competitive field have dampened investor interest. Ola Electric shares have been trading at a discount of around 3–4% on the grey markets since the last day of subscription on August 6. This often indicates a negative listing for the company's shares.
Nyati said, "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." The negative attitude in the grey market leading up to the listing further mirrored these worries. Nyati advised investors to sell and take a little profit, but risk-takers might cling onto their position by placing a stop loss below Rs 70.
Despite the recent market turbulence, investors responded well to Ola Electric's public offering, which had a lot size of 195 shares and was priced between Rs 72 and Rs 76. The offering was subscribed 4.45 times. Ola Electric made a fresh issuance of 723,684,210 equity shares available for purchase along with an offer for sale during its first public offering. The founders and investors sold 84,941,997 shares at a face value of Rs 10 each.
The company designated Link Intime India as the registrar for the initial public offering (IPO), and the book-running lead managers were Kotak Mahindra Capital Company, Bofa Securities India, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, Goldman Sachs (India) Securities, ICICI Securities, and Bob Capital Markets.
The money raised from the IPO will be used by Ola Electric to pay down debt, build up its gigafactory, finance efforts aimed at organic growth, and assist with R&D and product development. The remainder of the money will be used for normal business needs.
