Ola Electric’s initial public offering (IPO) achieved full subscription on its second day of trading, as per the Bombay Stock Exchange (BSE) data. The company set the IPO price range between INR 72 and INR 76 per share, which values the company at approximately INR 33,500 crore (around $4 billion) at the higher end of the spectrum. By 4:57 pm on Monday, the retail portion of the IPO was subscribed nearly three times, showcasing strong investor interest. The non-institutional investor segment saw a slight oversubscription of 1.11 times, while the employee shares experienced the highest demand with a nearly nine-fold oversubscription. However, the portion allocated to qualified institutional buyers received bids for only 40% of the shares available, marking the lowest subscription rate among all categories.
The IPO, which began with a 35% subscription on the first day of bidding last Friday, is set to close on Tuesday. Earlier, on Thursday, Ola Electric had raised INR 2,763 crore from prominent anchor investors, including Nomura India Investment Fund, State Bank of India Mutual Fund, HDFC Mutual Fund, and Goldman Sachs. This public offering stands out as one of the largest in India this year, featuring a fresh issue worth INR 5,500 crore and an offer-for-sale (OFS) of 84 million shares. Notable shareholders such as Founder Bhavish Aggarwal, along with early investors like Alpha Wave, Alpine, DIG Investment, and Matrix Partners, are selling shares through the OFS.
The company adjusted its valuation by approximately 25% lower compared to its previous private funding round to attract a broader range of investors. Aggarwal emphasized that the IPO was priced “attractively” to engage the entire Indian investor community.
Ola Electric has shown remarkable financial growth despite an increase in losses. For the fiscal year 2024, the company reported a 90% surge in operating revenue, reaching INR 5,009 crore, up from INR 2,630 crore in the previous year. However, the company’s losses expanded to INR 1,584 crore from INR 1,472 crore year-on-year. With a market capitalization of INR 33,500 crore, Ola Electric is valued at a market cap-to-sales ratio of about 6.6 times, reflecting a significant market presence.
The IPO’s success highlights strong investor confidence and interest in Ola Electric’s future prospects, despite the company’s ongoing financial challenges. The subscription patterns indicate robust retail and employee engagement, though institutional interest was comparatively lower. The outcome of the IPO could set a precedent for future tech and automotive sector public offerings in India.
