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Ola Electric’s initial public offering (IPO) attracted a substantial $1.8 billion in bids as it closed on Tuesday, marking a significant milestone as the first stock offering by a pure-play electric vehicle (EV) manufacturer in India. The IPO, valued at $734 million, has emerged as the largest in the country this year.
The SoftBank-backed company saw bids for 1.99 billion shares, which is approximately 4.3 times the number of shares available, according to data from the exchange. This robust interest underscores investor enthusiasm for clean energy initiatives, particularly in light of Prime Minister Narendra Modi’s government’s push for sustainable transport solutions. The IPO is expected to value Ola Electric at around $4 billion, as indicated in a term sheet released last week.
Although the figures are notable, the targeted valuation is 25% lower than the amount set during Ola Electric’s previous funding round in 2023. This reduction reflects a broader correction in global tech valuations and the company’s strategy to attract a wider range of investors. The institutional investor portion, including foreign investors, banks, and mutual funds, was oversubscribed 5.3 times. Meanwhile, retail investors showed strong interest, bidding 3.9 times the shares available for them.
As of June 30, Ola Electric, a major force in India’s emerging electric vehicle market, commanded a 46% share of the e-scooter segment. Despite this leading position, the company has encountered difficulties, such as increasing costs and challenges in achieving profitability. Analysts have expressed concerns about the company’s increasing losses and the capital required for its battery cell manufacturing unit.
The company plans to invest approximately $150 million of the IPO proceeds into this unit, which is crucial for its long-term profitability. Despite the lower subscription rate compared to recent high-profile IPOs, Ola Electric’s debut reflects the growing interest in EVs amid a turbulent global equity market.