Ola Electric IPO: A Flat Start but a 17.77% Rise on BSE Marks the Debut

On Thursday, August 9, 2024, Ola Electric, a well-known participant in the Indian electric vehicle (EV) sector, made its eagerly awaited debut on the NSE and BSE. The issue price of the company's shares was ₹76 on the NSE when they opened and ₹75.99 on the BSE. Considering the conflicting emotions in the market and the cautious prognosis from analysts, this flat debut was partly expected. Nevertheless, Ola Electric's shares saw a spike, increasing by almost 17.77% on the BSE and hitting ₹89.50 soon after listing, in contrast to the initial drab performance.

The initial flat listing indicates a cautious attitude about Ola Electric by the market. The company's shares were listed at the top end of the ₹72–₹76 price range for the initial public offering (IPO). 195 Shares are the minimum lot size required for an application. Retail traders are needed to invest a minimum amount of ₹14,820. For both sNII and bNII, the minimum lot size investment is ₹207,480 for 14 lots (2,730 shares) and ₹1,007,760 for 68 lots (13,260 shares). 

Despite this, the IPO did not experience the meteoric rise in value that some investors may have anticipated. Several reasons, including the company's financial performance, the state of the market, and investor attitude, can be blamed for the lacklustre response.

Although acceptable, the IPO's subscription rate of 4.45 times was less than several other well-known IPOs' accomplishments. This suggests that although interest in the item was present, it wasn't particularly strong. The subscription was primarily driven by Qualified Institutional Buyers (QIBs) and retail investors, with the latter demonstrating strong interest. Investor caution may have been prompted by worries about the company's profitability and the competitiveness of the EV market, as indicated by the subscription rate's moderate level.

Opinions among analysts regarding Ola Electric's market launch and prospects have been divided. The flat listing and the 4.45 times subscription rate, according to Shivani Nyati, Head of Wealth at Swastika Investment, indicate Ola Electric's difficulties in winning over investors. She made the point that although the company has big plans for the EV industry, investor enthusiasm has been dampened by its recent financial performance, which is characterised by steady losses. Furthermore, Ola Electric faces formidable obstacles to its expansion and financial success due to the fiercely competitive industry in which it competes.

The OLA Electric IPO is a ₹6,145.56 crore book-built issue. It consists of an offer to sell 8.49 crore shares, valued at Rs 645.56 crore, and a fresh issue of 72.37 crore shares, totalling Rs 5,500.00 crore.

The auction for the OLA Electric IPO was held from August 2, 2024, until August 6, 2024. The allocation for the OLA Electric IPO was completed on Wednesday, August 7, 2024. On August 9, 2024, the shares were listed on the BSE and NSE.

To Summarize

On Friday, August 9, Ola Electric made a quiet debut in the market. The NSE listed the shares at ₹76, which matched the issue price. The shares opened at ₹75.99 on the BSE, slightly lower. The stock saw a post-listing rise despite the initial flat listing, rising to ₹89.50, representing a 17.77% increase on the BSE. Qualified Institutional Buyers (QIBs) and retail investors drove the IPO's overall subscription rate of 4.45x, which was moderate. QIBs contributed 31.5x and 4.45x, respectively. A mix of freshly issued equity shares and an offer for sale (OFS) by current shareholders made up the IPO.​