Ola Electric IPO: Issue Fully Subscribed On Day 2, Retail Portion Booked 2.87X

The initial public offering (IPO) of electric vehicle maker Ola Electric was fully subscribed on the second day of the bidding today (August 5), witnessing a modest response with the issue getting oversubscribed 1.06 times. 

As per the BSE data, the IPO received cumulative bids for 49,43,85,840 (49.43 Cr) as against a total offering of 46,51,59,451 (46.51 Cr) shares. 

Notably, the IPO bidding had the maximum interest from its employees with the employee-reserved portion receiving an 8.9X subscription. The employees placed bids for 75.97 Lakh against 8.46 Lakh shares on offer. 

Meanwhile, the retail individual investor segment bid for 24.36 Cr shares in comparison to 8.48 Cr shares reserved for them. This marks an oversubscription of 2.87X. 

The non-institutional investors (NIIs) maintained a muted stance by oversubscribing only 1.11X. They bid for 14.1 Cr as against 12.72 Cr shares offered by the startup. 

Not to mention, Qualified institutional buyers (QIBs) seemed most averse to the public issue on the day. QIBs bid for just 10.2 Cr shares versus 25.22 Cr shares reserved for them, marking a subscription of just 40%. 

The IPO offering on the second day maintained the patterns shown in terms of segments with the most subscribed and least subscribed segments being employees reserved portion and QIBs, respectively. 

Notably, the IPO was subscribed 35% on the first day of bidding on Friday (August 2) with a portion reserved for employees witnessing a 4.8X subscription.

It is pertinent to note that just before kickstarting the IPO on August 2, Ola Electric raised INR 2,763 Cr from anchor investors at INR 76 per equity share. 

The IPO is slated to close on August 6 to enable the public listing of Ola Electric on the stock exchanges BSE and NSE. The price band of this public issue was between INR 72-76 per equity share to raise INR 6,145.6 Cr at the upper price limit. 

The EV major received its nod from the market regulator Securities and Exchange Board of India (SEBI) last month. However, it filed its draft red herring prospectus (DRHP) in December last year to raise fresh issues of shares worth up to INR 5,500 Cr and an offer-for-sale (OFS) component of up to 8.49 Cr shares. 

Cofounder CEO Bhavish Aggarwal and major investors such as Softbank, Temasek, Tiger Global, Alpha Wave, Tekne Capital, and Matrix Partners are slated to participate in the OFS. 

Ola Electric is planning to use the proceeds from the fresh issue for setting up Ola Gigafactory project. Besides this, it will be deployed towards research and product development, organic growth initiatives and general corporate purposes.

A notable portion of the proceeds will also go towards repayment or prepayment of the indebtedness incurred by the subsidiary Ola Electric Technologies. 

Not to mention, even after opting for one of the biggest IPOs the EV major continues to struggle as the loss-making entity. 

On the financial front, its net loss zoomed 7.6% to INR 1,584.4 Cr in the financial year 2023-24 (FY24) from INR 1,472.1 Cr in the previous year. Ola Electric’s operating revenue jumped over 90% to INR 5,009.8 Cr during the year under review from INR 2,630.9 Cr in FY23.