- Ola Electric received bids worth over $2 billion for the $330 million quota reserved for major institutions, one day before the launch of its IPO on August 1.
- Bidding for retail investors and eligible employees opens on Friday. The price band for the offering has been set at between $0.86 and $0.91 per share.
OUR TAKE
Ola Electric’s successful IPO, attracting significant institutional interest, highlights the growing importance of sustainable transport in India. With strong revenues and a focus on vertical integration, the company is well-positioned to capitalise on the EV market’s expansion. The substantial oversubscription underscores investor confidence in green mobility.
–Vicky Wu, BTW reporter
What happened
Ola Electric has secured over $2 billion in bids from institutional investors ahead of its initial public offering (IPO) opening to retail investors, according to a source with direct knowledge of the matter. Shares have been allocated to Nomura, Norges Bank, and several Indian mutual funds.
The Indian electric scooter manufacturer, backed by SoftBank, aims to raise $734 million in what is the largest IPO in the country this year. The allocation for major institutional investors, totalling $330 million, was finalised on Thursday. SBI and HDFC Mutual Funds received shares valued at $30-36 million each, while Nomura and Norges Bank were allocated shares worth approximately $24 million each.
The IPO will conclude on August 6, with bidding for anchor investors having opened for a single day on August 1. Bidding for retail investors and eligible employees opens on Friday. The price band for the offering has been set at between $0.86 and $0.91 per share.
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Why it’s important
This successful IPO indicates strong investor confidence in the electric vehicle (EV) sector and highlights the growing importance of sustainable transportation solutions in India. Ola Electric, founded by Bhavish Aggarwal, is a leading player in the Indian EV market with the highest revenues among all EV two-wheeler manufacturers. The company is focused on building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells.
The robust response from investors, with an overall subscription of over 150 times, underscores the appeal of the EV market, especially as the world shifts towards greener mobility options. Proceeds from the public offer will be used to fund working capital requirements, invest in subsidiaries for debt repayment, and support general corporate purposes.
With a market cap-to-sales ratio of 6.6x at the upper end of the IPO price range, Ola Electric is positioned competitively among top global automobile entities, which typically trade between 1-8x on the same metric. This IPO marks a significant milestone for Ola Electric and signals the broader shift towards electrification in the automotive industry.
