Ola Electric: Investors’ enthusiasm for this year’s biggest IPO, Ola Electric, is suddenly waning. The subscription of this IPO of more than Rs 6145 crore was open to the general public from August 2, and its last date is today, i.e. August 6. Its grey market price (GMP) was around Rs 16 before the subscription opened, which has now come down to Rs 4. Due to its sluggish subscription, investors are feared to not get much benefit from its listing.
The Price Band Of The IPO Is Between Rs 72 to Rs 76
Ola Electric has kept the IPO price band between Rs 72 and Rs 76 per share. According to the Business Standard report, the GMP’s listing is estimated to be around Rs 80. The company launched a fresh issue of Rs 5500 crore and an offer for sale of about Rs 645 crore in the market—however, only 35% of subscribers subscribed on the first day. Till Monday, only 72% were subscribed. Now, investors’ eyes are fixed on Tuesday.
The IPO Is To Be Listed On August 9
The portion reserved for retail investors has been subscribed 2.61 times, for non-institutional investors (NII) 81 per cent, and employees 8.38 times. This is the first IPO brought by an Indian electric vehicle manufacturer. SEBI approved Ola Electric to get an IPO only last month. The IPO may be listed on August 9.
The IPO Came At A Lower Valuation Than The Valuation Received In The Funding Round
Many brokerage firms have also given different opinions about this IPO. They have expressed concern about the company’s low business and high valuation. This is why Ola decided to bring this IPO at a lower valuation than it got during the last funding round. Ola Electric suffered a net loss of Rs 1,584.40 crore in FY 2024.
The company’s CEO, Bhavish Aggarwal, will sell 3.8 crore shares through the IPO. The money from the IPO will be used to expand its manufacturing plant. Apart from this, Rs 1600 crore will be spent on research and product development, and Rs 800 crore will be spent on repaying the loan.
