Ola Electric IPO: Issue Subscribed 35% On Day 1

SUMMARY

The portion reserved for employees saw 4.8X subscription, with bids received for 41.28 Lakh shares as against 8.46 Lakh shares on offer

Retail individual investors bid for 13.31 Cr shares as against 8.48 Cr shares on offer, resulting in a 1.57X subscription

A day ahead of the opening of bidding for the issue, Ola Electric raised INR 2,763 Cr from anchor investors

The initial public offering (IPO) of electric vehicle (EV) maker Ola Electric was subscribed 35% on the first day of bidding on Friday (August 2).

As per the BSE data, Ola Electric IPO received bids for 16.34 Cr shares as against 46.51 Cr shares on offer.

The startup’s IPO saw maximum interest from its employees. The portion reserved for employees saw 4.8X subscription, with bids received for 41.28 Lakh shares as against 8.46 Lakh shares reserved for them.

Retail individual investors (RIIs) bid for 13.31 Cr shares as against 8.48 Cr shares on offer, resulting in a 1.57X subscription.

However, interest from non-institutional investors (NIIs) remained muted on Day 1. NIIs bid for 2.60 Cr shares as against the 12.72 Cr shares reserved for them, resulting in a 20% subscription.

Qualified institutional buyers (QIBs) were the least interested in the public issue on the first day. QIBs bid for just 1.44 Lakh shares as against 25.22 Cr shares reserved for them.

On Thursday, the EV startup raised INR 2,763 Cr from anchor investors.

The company’s IPO will close on August 6 after which it will get listed on the BSE and the NSE. It has set a price band of INR 72-76 per equity share for its public issue. At the upper end of the price band, it would raise INR 6,145.6 Cr.

The IPO comprises a fresh issue of shares worth up to INR 5,500 Cr and an offer-for-sale (OFS) component of up to 8.49 Cr shares.

The proceeds from the fresh issue will be deployed for capital expenditure to set up the Ola Gigafactory project, investment into research and product development, and organic growth initiatives.

Wealth management and investment advisory Devan Choksey gave the IPO a “subscribe” rating. It believes that Ola Electric can gain market share post the IPO as it is already the market leader in the E2W category.

“The company prioritises R&D and plans to continue launching next-generation EVs. The company’s strategic initiatives include the development of the Ola Gigafactory and a focus on backward integration to enhance supply chain control and cost efficiency. Overall, the growth plans and cost efficiency initiatives justify the valuation,” it said.