Ola Electric IPO: Key Highlights and Investor Considerations

Ola Electric Mobility Limited's much-anticipated IPO opens on Friday, offering shares at Rs 72-76 each. Subscription closes on August 6, 2024. The company aims to raise Rs 55,000 million through this IPO. While it presents potential investment opportunities, investors should be aware of associated risks and challenges.

Ola Electric Mobility Limited's long-awaited initial public offering (IPO) is slated to open for subscription this Friday. The pure electric vehicle manufacturer based in Bengaluru has set a price band of Rs 72 to Rs 76 per share for its IPO.

The subscription window for Ola Electric's IPO will be open from Friday until Tuesday, August 6, 2024. This IPO includes a fresh issue of equity shares amounting to Rs 55,000 million and an offer for sale of up to 84,941,997 equity shares. Post-issuance, the shares will be listed on both the BSE and NSE.

The IPO will be executed via the Book Building Process, allocating not less than 75 percent of the net offer to qualified institutional buyers, 15 percent to non-institutional bidders, and the remaining 10 percent to retail individual bidders. Despite the company’s reported losses in recent financial years, it has continued to innovate, delivering several EV models including the Ola S1 Pro and upcoming variants. Investors should carefully consider potential risks and challenges, particularly those related to supply chain disruptions and the reduction of government incentives. The company aims to invest Rs 16,000 million of the proceeds into research and development.

Ola Electric was established in 2017 and delivered its first electric scooter in December 2021. While the company benefits from various government subsidies, it faces risks related to sourcing raw materials from China, which could be affected by political tensions and changes in trade policies. InCred Equities remains cautiously optimistic about the IPO, citing potential volatility from policy changes and delays in EV cell plant setups.

Bhavish Aggarwal, the Founder, Chairman, and Managing Director, spearheads Ola Electric. Investors are advised to weigh the promising prospects against intrinsic risks before making investment decisions.