Ola Electric Mobility Limited, a prominent player in India’s electric vehicle (EV) market, is set to launch its Initial Public Offering (IPO). This move has generated considerable buzz in the financial and automotive sectors. Here’s an in-depth look at the details surrounding Ola Electric’s IPO, company overview, and financials.
About OLA Electric
According to the papers filed with SEBI, the company is a pure EV player in India building vertically integrated technology and manufacturing capabilities for EVs and EV components. OLA Electric manufacture EVs and certain core EV components at the Ola Futurefactory. According to the company it is building an EV hub in Tamil Nadu, India, comprising its Ola Futurefactory for EV manufacturing, its Ola Gigafactory for cell manufacturing, and co-located suppliers. “We operate a direct-to-customer omnichannel distribution network across India, comprising 870 experience centres and 431 service centres as at March 31, 2024.
Allotment and Listing
The allotment of shares is expected to be finalised by August 07 and listing to be thereafter on NSE and BSE on August 09, as per the tentative schedule.
Minimum Investment Required
A retail subscriber needs to apply for a minimum of one lot that contains 195 shares, amounting to Rs 14,820. Meanwhile, there are different lot sizes and investment requirements for NIIs and QIBs. For small NIIs, the minimum lot size is 14 of 2,730 shares and for big NIIs, the lot size is 68 containing 13,260 shares.
BRLMs and Registrar
Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, Goldman Sachs (India) Securities, ICICI Securities, and BoB Capital Markets are the lead book-runners for the OLA Electric’s issue. Link Intime India is handling the work of the registrar.
IPO Details
1. IPO Date: The IPO will open for subscription on August 2, 2024, and will close on August 6, 2024. This five-day window will allow investors to subscribe to the shares. The timing is strategic, aligning with market conditions and investor sentiment to maximize participation and capital raise. The chosen dates also provide sufficient time for market analysis and investor decision-making.
2. Issue Size: The total issue size comprises a fresh issue of Rs 5,500 crore and an offer for sale of 8.49 crore shares. The fresh issue will generate new capital for the company, while the offer for sale will allow existing shareholders to divest part of their holdings. This combination aims to balance fundraising for growth initiatives and providing liquidity to current investors.
3. Price Band: Ola Electric has set a price band of Rs 72 to Rs 76 per equity share. The price band is crucial as it sets the range within which investors can bid for shares. This range will be determined based on market conditions, investor demand, and the company’s valuation.
4. Listing: The shares are slated to be listed on the BSE and NSE exchanges on August 9, 2024.
5. Minimum Lot Size: The minimum lot size for an application is 195 shares, which means based on the higher price range, the minimum amount of investment for retail investors is Rs 14,820.
Expert’s Take on IPO
“As India focuses on reducing its carbon footprint and enhancing energy security, Ola Electric’s IPO could be a pivotal development in the green mobility space. With a 35% market share in India’s electric two-wheeler market in FY24, up from 21% in FY23, Ola Electric sold 3.29 lakh units in FY24, more than doubling its sales from the previous year. IPO not only showcases OLA Electric’s growth and market leadership but also highlights the potential of the EV sector,” said Master Capital Services.
This comprehensive guide on Ola Electric’s IPO provides a detailed overview of the key aspects, including the IPO specifics, company background, financials, growth prospects, and potential challenges. This information is essential for potential investors, market analysts, and anyone interested in the evolution of the electric vehicle market in India.
Conclusion
Ola Electric’s initial public offering (IPO) is set to open on August 2, with a price band of Rs 72-76. The IPO comprises a fresh issue of shares worth Rs 5,500 crore and an offer for sale (OFS) of 8,49,41,997 shares. The company aims to use the net proceeds from the IPO to expand its battery cell manufacturing plant, repay loans, invest in research and product development, and fund growth initiatives. Ola Electric dominates the electric scooter segment in India, with a 39% market share as of July 27. The IPO is expected to be one of the biggest new-age IPOs in 2024, and investors can bid for a minimum of 195 equity shares and in multiples of 195 shares thereafter.
FAQ’s
- Q: When does the Ola Electric IPO open? A: The Ola Electric IPO opens on August 2 and closes on August 6.
- Q: What is the price band for the Ola Electric IPO? A: The price band for the Ola Electric IPO is ₹72-76 per share.
- Q: What is the minimum bid quantity (lot size) for the Ola Electric IPO? A: The minimum bid quantity (lot size) is 195 shares and in multiples of 195 thereafter.
- Q: How much does Ola Electric aim to raise through the IPO? A: Ola Electric aims to raise a total of ₹6,145.56 crore through the IPO.
- Q: What is the objective of the Ola Electric IPO? A: The objective of the IPO is to utilise ₹1,227.6 crore for capacity expansion of its cell manufacturing plant, ₹1,600 crore for research and product development, ₹800 crore to repay debts, and ₹350 crore for organic growth initiatives.
- Q: Who can participate in the Ola Electric IPO? A: Qualified institutional buyers (QIB), non-institutional investors (NII), and retail investors can participate in the IPO. Eligible employees are also being offered a discount of ₹7 per share in the bidding.
- Q: When is the listing date for Ola Electric shares? A: Ola Electric shares are tentatively scheduled to be listed on both the BSE and the NSE on August 9.