Ola Electric IPO opens today: GMP signals upside potential; Analysts weigh

Ola Electric IPO, which opens for subscription today, will be available at a price band of Rs 72-76 per share with a lot size of 195 shares

Ola Electric IPO GMP: The unlisted shares of the much-awaited Ola Electric IPO (Ola Electric Mobility Limited), which opens for subscription today, are trading at a premium in the grey markets. Ola Electric shares are currently commanding a grey market premium (GMP) of around Rs 13-15 apiece, suggesting a potential premium of 17-20 per cent if trends sustain.

Earlier, on August 1, India's largest electric two-wheeler (e2W) manufacturer raised Rs 2,763.03 crore from anchor investors ahead of its opening. The three-day subscription window for the Ola Electric IPO closes on Tuesday, August 6, 2024. The IPO is available at a price band of Rs 72-76 per share with a lot size of 195 shares.

 

With this public issue, Ola Electric is offering a fresh issue of 723,684,210 equity shares worth approximately Rs 5,500 crore and an offer for sale by the promoters and investors, offloading 84,941,997 shares worth Rs 645.56 crore.

Brokerages on Ola Electric IPO

As the Ola Electric IPO opens for public subscription, brokerages including Geojit, LKP Securities, and the Anand Rathi Research Team have shared their outlook on the issue.

Geojit has recommended the investors to subscribe to the Ola Electric IPO with a long-term outlook. At the upper price band of Rs 76, OEML's EV/sales ratio of 7.2x (FY24) appears expensive to analysts at Geojit. "However, as a leader in the E2W segment, the company is in a strong growth phase with robust R&D, a broad product portfolio, and a vertically integrated approach. Despite current profitability challenges and valuation concerns, we recommend a Subscribe rating for high-risk investors with a long-term outlook," said the brokerage. 
 

Analysts at LKP Securities also recommended that investors to Subscribe for long-term outlook and said, "Based on the narrative of EV proliferation in the country (current EV scooter penetration at 15 per cent), we believe Ola will ride the tide as the only pure-play two-wheeler EV. Therefore, keeping a cautious view on the demand and the reduction in losses for Ola, we recommend subscribing to this IPO with a long-term perspective."

Anand Rathi Research Team suggested subscribing to the Ola Electric IPO for the long term based on the valuations and said, "On the valuation front, we believe that the company is richly priced. Thus, we recommend a 'Subscribe – long term' rating for the IPO with a higher risk appetite."

Ola Electric IPO key details

Ola Electric has appointed Link Intime India as the registrar for the public issue, while BofA Securities India, Goldman Sachs (India) Securities Private, Kotak Mahindra Capital Company, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, BoB Capital Markets, and ICICI Securities are the book-running lead managers of the IPO.

The basis of allotment for the Ola Electric IPO shares is likely to take place on Wednesday, August 7, 2024, and the company's shares are expected to be credited to demat accounts on Thursday, August 8, 2024. Ola Electric shares are scheduled to make their debut on the BSE and NSE on Friday, August 9, 2024.

About Ola Electric Mobility Limited

Incorporated on 3 February 2017, Ola Electric is a pure EV player in India and is building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. 

Ola Electric's revenue from operations during the fiscal year 2023-24 jumped to Rs 5,009.83 crore from Rs 2,690.92 crore reported in FY23. In FY24, the company's EBITDA dropped to Rs 1,040.19 crore from Rs 1,197.09 crore reported in FY23. Meanwhile, Ola Electric's loss widened to Rs 1,584.44 crore in FY24, according to the RHP papers.