Ola Electric Mobility’s share price continued its impressive ascent on Monday, locking in a 20% upper circuit limit for the second consecutive trading session. This surge follows a strong upward trend that began on Friday. On the Bombay Stock Exchange (BSE), the stock price of Ola Electric surpassed the ₹100 mark, opening at ₹97.21 per share. Throughout the day, it reached an intraday high of ₹109.41 and a low of ₹95.28.
The significant rise in Ola Electric’s share price on Friday was driven by robust investor interest and the growing adoption of electric vehicles in India. The largest e-scooter manufacturer in the country saw its stock end 20% above the maximum permitted price of ₹91.20, marking a substantial increase from its initial public offering (IPO) price of ₹76 per share.
Ola Electric’s stock debuted at ₹75.99 on Friday, slightly below the issue price on the BSE. However, it quickly recovered, climbing 19.97% to reach ₹91.18, hitting the upper circuit limit. On the National Stock Exchange (NSE), the shares were listed at the IPO price of ₹76 but also surged to ₹91.20, reflecting a 20% gain and reaching its upper circuit limit.
Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, commented on the situation: “Despite receiving demand well below street expectations, Ola Electric’s share price listed flat, alleviating fears of a discounted listing. Significant buying was observed post-listing, and the long-term outlook remains positive. Markets are also anticipating the launch of the Ola Electric Bike in India on August 15. Given these factors, we advise risk-taking investors to maintain their positions with a minimum holding period of 2-3 years and to accumulate shares on any dips to benefit from the long-term potential.”
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The IPO for Ola Electric Mobility, valued at ₹6,145 crore, saw an enthusiastic response with subscriptions oversubscribed by 4.27 times on its final day, August 6. The share sale, which ran from August 2 to August 6, had a price band set between ₹72 and ₹76 per share.
The proceeds from the ₹5,500-crore public offering will be allocated towards several key initiatives. Ola Electric plans to invest ₹1,227.6 crore in expanding the capacity of its cell manufacturing facility from 5 GWh to 6.4 GWh. Additionally, ₹1,600 crore will be directed towards product development and research, ₹800 crore for debt repayment, and ₹350 crore for organic growth efforts.
According to the company’s Red Herring Prospectus (RHP), phases 1 (a) and 1 (b) of the Ola Gigafactory’s establishment and expansion in Krishnagiri district, Tamil Nadu, will be financed through internal accruals and long-term borrowings provided by Ola Cell Technologies Pvt Ltd (OCT).
An upcoming board meeting for Ola Electric Mobility is scheduled for Wednesday, August 14, 2024. The agenda includes reviewing and approving the unaudited standalone and consolidated financial results for the quarter ending June 30, 2024.
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