Ola Electric Mobility, the brainchild of Bhavish Aggarwal, made a remarkable debut in the Indian stock market on August 9, 2024. The Initial Public Offering (IPO) garnered immense investor enthusiasm, being oversubscribed an impressive 4.26 times. On its first trading day, Ola Electric shares (OLAELEC) surged 16% above the IPO allotment price of ₹76 on the NSE. By around 10:45 a.m., the stock was trading nearly 16.45% higher on the NSE at ₹88.5.
Interestingly, by 2 p.m., the Ola Electric stock price had risen to ₹91.2, up 20%. This robust performance resulted in a market capitalization of ₹39,648.95 crore, according to the BSE.
Ola Electric IPO Response
The success of Ola Electric’s IPO can be attributed to strong investor enthusiasm, which was evident in the oversubscription of the public issue.
The IPO, which ran from August 2 to August 6, attracted bids for 1.9 billion shares, far exceeding the 460 million shares on offer. This means that the demand was significantly higher than the supply, indicating strong investor confidence in the company’s potential.
The allocation reserved for Qualified Institutional Investors (QIIs) was particularly strong, being subscribed 5.3 times. Retail individual investors also showed significant interest, subscribing 3.85 times their allotted shares, while non-institutional investors (NIIs) bid 2.4 times the shares allocated to them.
Employees also played a significant role in the Ola Electric IPO, purchasing 11.99 times the reserved portion. The company has also demonstrated its commitment to employee welfare by setting aside shares worth ₹5.5 crore for its employees, who will benefit from a discount of ₹7 per share on the final issue price.
“The importance of today, this moment is finally sinking in. It felt like a process till yesterday – where we did our work and put in our time and made India one of the largest EV 2W markets. Our hard work has paid off, and the world recognises that,” said Bhavish Aggarwal on the X platform.
Future Plans
After its successful public launch, Ola Electric has ambitious growth plans to gain a strong foothold in India’s electric vehicle market. The company’s strategic investments aim to drive expansion, advance technological capabilities, and ensure long-term success.
A central component of Ola Electric’s growth strategy post-IPO is the expansion of its cell manufacturing plant. The company plans to invest ₹1,227.64 crore to increase the plant’s capacity from 5 GWh to 6.4 GWh.
Additionally, ₹800 crore will be allocated towards debt repayment, ₹1,600 crore will be dedicated to research and product development, and ₹350 crore will be used for organic growth initiatives. These investments are designed to support Ola Electric’s continued innovation and expansion in the electric vehicle sector.
The noteworthy oversubscription of Ola Electric’s IPO by all categories of investors highlights strong confidence in the two-wheeler EV company. Have you invested in Ola Electric shares yet? Let us know in the comment section below!
