Image Credits - ibtimes
The Rs 6,146-crore Ola Electric Mobility IPO has received a robust response from investors, with the issue garnering a subscription of 4.26 times the shares on offer on August 6, the final day of bidding.
Breakdown of Subscriptions
According to subscription details from stock exchanges, investors have subscribed to 198.15 crore equity shares compared to the offer size of 46.51 crore shares. Qualified Institutional Buyers (QIBs) and retail investors showed strong interest, subscribing 5.31 times and 3.86 times their respective quotas. Non-institutional investors (High Net worth Individuals) bid 2.39 times their allocated portion as of 5:00 pm on August 6.
Employees also showed strong participation in the public issue, purchasing 11.67 times the reserved portion. The electric vehicle maker allocated Rs 5.5 crore worth of shares for its employees, who will receive these shares at a discount of Rs 7 per share of the final issue price.
The Bengaluru-based company intends to raise Rs 5,500 crore via the fresh issue component and the remaining Rs 645.6 crore through the offer-for-sale (OFS). The price range for the public issue has been set at Rs 72-76 per share.
Capital Utilization
Ola Electric, which manufactures core EV components such as battery packs, motors, and vehicle frames at its Ola Futurefactory, plans to allocate Rs 1,227.64 crore for expanding the capacity of its cell manufacturing plant.
Additionally, Rs 800 crore will be used for debt repayment, Rs 1,600 crore for research and product development, and Rs 350 crore has been set aside for organic growth initiatives.
The electric vehicle maker will finalize the basis of the 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 Ola Electric’s shares will begin on the stock exchanges starting August 9.
Market observers have noted that currently, Ola IPO shares are not fetching any premium in the grey market. The grey market is often seen as an unofficial indicator for the upcoming listed shares of the IPO.
Ola’s Financial Performance
The electric vehicle company posted a net deficit of Rs 1,584.4 crore for the fiscal year 2024, an increase from the Rs 1,472 crore deficit posted the previous year. Despite the widening deficit, revenue from operations grew substantially, reaching Rs 5,009.8 crore compared to Rs 2,630.9 crore in the prior year.