Ola Electric’s one-month lock-in period expires, 18.18 crore shares eligible for trade; shares sink 4%

Ola Electric shares settled at Rs 109.57 on the NSE during the previous session, marking a 44 percent jump from its issue price of Rs 76 per share.

Ola Electric Mobility will see its one-month share lock-in period end on September 9, as the date marks one month since the EV player's debut on the bourses.

Once the one-month shareholder lock-in period for Ola Electric ends on Monday, around 18.18 crore shares, representing 4 percent of the company's outstanding equity, will become eligible for trading, as highlighted in a note by Nuvama Alternative and Quantitative Research.

At 9.40 am, shares of Ola Electric were quoting Rs 105.3, down almost 4 percent on the NSE.

However, it is important to clarify that the end of the lock-in period doesn't imply all these shares will necessarily be sold, they will simply be eligible for trading.

In its report, Nuvama Institutional Equities noted that between September 5, 2024, and November 30, 2024, a total of 38 companies are slated to have their pre-listing shareholder lock-ins lifted amounting to the value of $21 billion.

"The value pertains to the total lock-up opening shares, but it’s important to note that not all of these shares will come for sale as a sizable portion of these shares are also held by promoter and group," said the brokerage.

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HSBC initiated coverage on Ola Electric with a price target of Rs 140. Though HSBC has a conservative stance on EV penetration in India, the brokerage believes Ola Electric is 'worth investing in' due to sustained policy support, ability to reduce costs, and a favourable risk-reward profile for the battery venture.

Ola Electric's Bhavish Aggarwal believes the incumbent two-wheeler players run the risk of cannibalising their ICE models, and may end up burning a hole in their balance sheets as they build their electric mobility business.

Instead, Ola, he argues, is better-positioned due to its focus on profitable growth, and is already at ‘break-even’ on an EBITDA level. Bhavish added that unlike incumbents, Ola has already ramped up its investment in technology and R&D in the electric space.

"Over last 4 years, we have invested $1 billion in our technology and manufacturing, which is focused on EVs," Bhavish Aggarwal told CNBC-TV18 during a conversation on September 5.

Ola Electric shares settled at Rs 109.57 on the NSE during the previous session, marking a 44 percent jump from its issue price of Rs 76 per share.

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