The initial public offering (IPO) of Ola Electric Mobility Limited, a leading name in India’s electric vehicle (EV) sector, is generating considerable buzz as it approaches its subscription opening. Scheduled to raise a substantial Rs 6,145.56 crore, this IPO is currently the largest one of the year.
Founded in 2017 by Bhavish Aggarwal, Ola Electric Mobility has quickly established itself as a major player in the EV industry. The company focuses on manufacturing electric vehicles and crucial components such as battery packs, motors, and vehicle frames at its state-of-the-art Ola Futurefactory. The IPO will consist of a fresh issue of 72.37 crore shares valued at Rs 5,500.00 crore and an offer to sell 8.49 crore shares, which is estimated at Rs 645.56 crore. The offering will be open for subscription from August 2, 2024, to August 6, 2024, with the price band set between Rs 72 and Rs 76 per share.
According to Master Capital Services Ltd, the proceeds from this IPO will be allocated to several key areas. The largest portion will go towards expanding the cell manufacturing capacity of Ola Gigafactory, a strategic move to boost production capabilities. Additionally, funds will be used to repay existing debt, invest in research and development initiatives, support organic business expansion, and cover general corporate purposes.
Ola Electric has achieved notable growth, capturing a 35% share of India’s electric two-wheeler market in fiscal year 2024, up from 21% in the previous fiscal year. The company sold 3.29 lakh units in FY24, marking a significant increase from the previous year’s sales figures. This growth not only highlights Ola Electric’s market leadership but also underscores the broader potential of the electric vehicle sector. Prospective investors are encouraged to carefully review the company's prospectus, financial statements, and associated risk factors before making investment decisions.
The IPO’s advantages include Ola Electric’s early entry into the EV market, which provides it with a first-mover advantage. The company’s scalable design and development approach further support its potential for future growth and adaptation. However, there are also challenges to consider. A reduction or removal of government incentives for electric vehicles could impede the sector’s growth. Initial consumer skepticism about EVs might delay widespread adoption, and the highly competitive and rapidly evolving automotive technology market presents ongoing challenges.
As for the latest market insights, the Grey Market Premium (GMP) for the Ola Electric IPO, as of July 29, 2024, at 4:30 PM, stands at Rs 11.70. Given the price band is set at Rs 76, this implies an estimated listing price of Rs 87.7 when combined with the GMP. This projection suggests an anticipated percentage gain or loss of approximately 15.39% per share.
It is important to note that the views, opinions, recommendations, and suggestions provided by experts and brokerages regarding the IPO are their own and do not necessarily reflect the views of the India Today Group. Investors are advised to seek guidance from qualified brokers or financial advisors before making any actual investment or trading decisions.
