Shares of Ola Electric Mobility are set to debut on the stock market on Friday, August 9. However, signs from the unofficial market indicate a potentially rough start. The grey market premium (GMP) for Ola Electric has been falling steadily, suggesting a negative listing.
Due to low investor interest and overall market volatility, the GMP has dropped significantly, and the company is trading at a 3% discount, indicating a likely loss for initial investors. Market experts are cautious about Ola Electric's listing prospects, highlighting the company's ongoing losses despite rising revenues.
Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, pointed out that the stock is priced at a negative price-to-earnings (P/E) ratio due to negative earnings, leading to expectations of a negative listing. He advises investors to avoid the IPO.
The IPO, which was open for bidding from August 2 to August 6, offered shares in the price range of Rs 72-76 each, with a lot size of 195 shares. Ola Electric raised Rs 6,145.56 crore, including a fresh share sale of Rs 5,500 crore and an offer-for-sale (OFS) of up to 8,49,41,997 shares. The issue was subscribed 4.27 times overall, with qualified institutional bidders (QIBs) subscribing 5.31 times, non-institutional investors 2.40 times, retail investors 3.92 times, and employees 11.99 times.
Founded in 2017 and based in Bengaluru, Ola Electric Mobility primarily manufactures electric vehicles and core components such as battery packs, motors, and vehicle frames at its Ola Futurefactory. Stoxbox research Analyst Parth Shah expects Ola Electric to list at a 3% discount to its issue price. Despite the possibility of a discounted listing, he suggested holding Ola Electric shares for medium to long-term gains, citing the company's plans to expand into international markets, positive EV market outlook, favorable regulatory environment, new model announcements, and the upcoming cell manufacturing unit (Gigafactory).
However, investors should note that brokerage firms have mixed views on the IPO. Some are optimistic about Ola Electric's leadership in the electric two-wheeler market and the government's push for EV adoption. Yet, concerns remain about the company's losses and high valuations.
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