Ola Electric IPO fully subscribed but GMP hints lacklustre debut
The Initial Public Offering (IPO) of Ola Electric, India's leading electric two-wheeler brand, was fully subscribed on the second day of bidding. On the first day, 35% of the issue was booked. By 4.42pm today, bids for over 49 crore shares had been placed, surpassing the issue size of 46.5 crore shares. The retail individual investors' quota saw a subscription rate of 2.86 times while non-institutional investors subscribed to the issue at a rate of 1.09 times.
Details of Ola Electric's IPO composition
The Ola Electric IPO consists of a fresh issue worth ₹5,500 crore and an offer for sale (OFS) of 8.4 crore shares. Founder Bhavish Aggarwal is set to offload 37.9 million shares in the IPO and is likely to become richer by ₹288cr. Additionally, firm's investors including Alpha Wave, Alpine, DIG Investment, and Matrix will be selling a combined total of 47.89 million shares. Two early investors in the company are set to bag gains of up to 800%.
Ola Electric raises funds from anchor investors pre-IPO
Prior to the opening of the issue, Ola Electric successfully raised over ₹2,700 crore from anchor investors. These included prominent names such as Nomura, HDFC Mutual Fund, SBI Mutual Fund and several others. This funding round significantly bolstered the company's financial standing ahead of its public offering. Analysts at LKP Securities have recommended subscribing to the Ola Electric IPO with a long-term perspective, citing the company's market leadership in India's domestic electric two-wheeler industry and positive sector developments.
Ola Electric's IPO pricing and valuation details
The company has priced the IPO in the range of ₹72-76 per share. At the upper end, it will be valued at market cap-to-sales of 6.6x with a market cap of just over ₹33,500 crore. In FY 2024, Ola Electric saw its revenue from operations increase to ₹5,009.8 crore, up from ₹2,630.9 crore in FY 2023. However, the company's loss also significantly increased to ₹1,584.4 crore in FY24 from a loss of ₹1,472 crore in FY23.
Grey market premium for Ola Electric drops
The grey market premium (GMP) for Ola Electric has seen a significant drop from ₹16 when the IPO was announced to just ₹4 on the second day of bidding. This suggests a potential listing gain of about 5% for investors, indicating a tempered but still positive market response to the company's public offering, which is poised to be the biggest in India this year.
