Ola Electric's IPO subscribed 4.27 times on final day; QIB and retail leading

Ola Electric's IPO subscribed 4.26 times on final day so far; QIB and retail leading

The Rs 6,146-crore Ola Electric Mobility IPO has received healthy response from investors, with the issue garnering a subscription of 4.27 times the shares on offer on August 6, the final day of bidding.

Category-wise Subscription

Investors picked 198.79 crore equity shares against the offer size of 46.51 crore shares, subscription details from stock exchanges showed. Both Qualified Institutional Buyers (QIBs) as well as the retail category provided maximum support, subscribing 5.31 times and 3.92 times the allotted quota respectively, while non-institutional investors (High Networth Individuals) bid 2.4 times the portion set aside for them, on August 6.

Employees also recorded healthy participation in the public issue, buying 11.99 times the reserved portion. The electric vehicle maker has reserved Rs 5.5 crore worth shares for its employees who will get these shares at a discount of Rs 7 per share to the final issue price.

The Bengaluru-based company intends to raise Rs 5,500 crore via fresh issue component and the remainder Rs 645.6 crore through offer-for-sale (OFS). The price band for the public issue has been kept at Rs 72-76 per share.

Who is Selling?

Bhavish Aggarwal, Indus Trust, Alpha Wave Ventures II LP, Alpine Opportunity Fund VI LP, Internet Fund III Pte, MacRitchie Investments Pte, Matrix Partners India Investments III, LLC, SVF II Ostrich (DE) LLC, Tekne Private Ventures XV, and Ashna Advisors LLP are the selling shareholders in the OFS.

The Fund Raise

Ola Electric, which manufactures some core EV components like battery packs, motors and vehicle frames at its Ola Futurefactory, is going to spend Rs 1,227.64 crore for capacity expansion of its cell manufacturing plant from 5 GWh to 6.4 GWh.

Another Rs 800 crore will be used for repaying debt, Rs 1,600 crore for research and product development, and Rs 350 crore has been apportioned for organic growth initiatives.

The electric vehicle maker will finalise the basis of allotment of IPO shares by August 7, and equity shares will be credited to the demat accounts of successful investors by August 8.

Trading in the shares of Ola Electric will commence on the bourses effective August 9.

Currently, Ola IPO shares are not attracting any premium in the grey market, market observers noted. The grey market is generally considered to be an unofficial reference for the soon-to-be-listed shares of the IPO.

Ola's Earnings

The electric vehicle company has posted net loss of Rs 1,584.4 crore for the fiscal 2024, widening from the loss of Rs 1,472 crore in the previous year. However, during the same period, revenue from operations increased significantly to Rs 5,009.8 crore, from Rs 2,630.9 crore.