Ola Electric is the hottest D-Street debut this year worth investing in
Business Business. The upcoming initial public offering (IPO) of India’s first electric vehicle (EV) manufacturer Ola Electric Mobility Limited has generated a lot of interest even before its subscription period. This IPO is going to be the biggest IPO so far this year, aiming to raise Rs 6,145.56 crore. Founded in 2017 by Bhavish Aggarwal, Ola Electric Mobility Limited specializes in the production of electric vehicles. The company also manufactures key components such as battery packs, motors and vehicle frames at its Ola Futurefactory. The Ola Electric IPO is a mix of a fresh issue of 72.37 crore shares worth Rs 5,500.00 crore and an offer for sale of 8.49 crore shares worth Rs 645.56 crore. The IPO will open for subscription on August 2, 2024 and close on August 6, 2024. The price band for the Ola Electric IPO has been fixed at Rs 72-76 per share.Should you invest in Ola Electric IPO?LKP Securities said that EV bike launches next year as well as multiple new launches will help Ola Electric maintain its market share (45% by end of Q1 vs 39% by end of Q4).
Higher volumes are expected to increase operating leverage, thereby reducing losses, which we believe could happen in the mid-term.The brokerage house added, “A reduction in battery costs should also help. Hence, based on EV penetration in the country (currently EV scooter penetration is 15%), we believe Ola will remain ahead in this space being the only pure 2W EV. Hence, keeping an eye on demand and reduction in losses for Ola, we recommend subscribing to this IPO from a long-term perspective.” Master Capital Services Ltd said, “This IPO will see the issuance of fresh shares worth Rs 5,500 crore. The IPO proceeds will be allocated towards; a) Expansion of cell manufacturing capacity of Ola Gigafactory b) Debt repayment c) Research and development initiatives d) Organic business expansion e)
General purposes.” “With a 35% market share in India’s electric two-wheeler market in FY24, up from 21% in FY23, Ola Electric sold 3.29 lakh units in FY24, more than doubling its sales from the previous year. The IPO not only reflects Ola Electric’s growth and market leadership, but also highlights the potential of the EV sector. Investors are encouraged to review the company’s prospectus, financial statements and risk factors before making any investment decision,” it added. Latest GMP of Ola Electric IPOThe grey market premium (GMP) for Ola Electric IPO as of 1:55 pm on July 31, 2024 is Rs 15.50. With a price band of Rs 76, the estimated listing price for Ola Electric IPO is Rs 91.5, combining the cap price with today’s GMP. This implies an expected percentage rise or loss of 20.39% per share.
