Ola Electric shares surged made a modest entry into the stock market, with its shares listing at ₹76 on the NSE, matching the issue price. Similarly, the stock began trading at ₹75.99 on the BSE. Despite the quiet start, the stock hit a 20% upper circuit limit on August 9.
Ola Electric Shares Surged
Before the listing, Ola Electric shares were trading at a discount of ₹3 in the unlisted market. This was seen as a reflection of cautious market sentiment and concerns over the company’s financial health.
Expert Opinions on Market Sentiment
Shivani Nyati of Swastika Investmart anticipated a subdued listing due to current market conditions and the company’s financial performance.
Nyati emphasized that while Ola Electric’s ambition to become a global EV leader is impressive, the company’s ongoing financial losses are a significant concern. She also noted the challenges posed by high competition, pricing pressures, and employee attrition.
Listing Expectations and Recommendations
Prashanth Tapse, Sr VP Research at Mehta Equities, predicted a flat to discounted listing, with the possibility of a 5% to 10% decrease from the issue price. He suggested that a discounted listing would be reasonable given the company’s weak financials and potential for negative cash flows.
Tapse advised risk-taking investors to hold the stock for a minimum of 2-3 years and recommended accumulating shares on dips if the stock price falls below its IPO price.
IPO Details and Fund Allocation
Ola Electric’s IPO was subscribed 4.27 times, receiving strong interest from institutional and retail investors. The company offered shares in a price band of ₹72-76 per share, with a lot size of 195 shares. The IPO raised ₹6,146 crore, including ₹5,500 crore from a fresh share sale and an offer-for-sale (OFS) of up to 8.49 crore shares.
The company plans to allocate ₹1,600 crore of the net proceeds to research and development. However, Ola Electric cautioned that the outcome of these investments might not meet expectations.
Company Overview and Financial Performance
Ola Electric is a leading EV manufacturer in India, with integrated technology and manufacturing capabilities. The company has delivered seven products and announced four new ones. As of March 31, 2024, Ola Electric had 870 experience centers, 431 service centers, and an active online presence.
Despite its growth, the company remains loss-making, with a ₹1,584 crore loss in FY 2024, up from ₹1,472 crore in FY 2023.