Ola Electric Mobility IPO Subscribed 0.35 Times On Day 1

The initial public offering of Ola Electric Mobility Ltd. opened for subscription on Friday and received bids for 35% of the issue. The IPO seeks to raise up to Rs 6,145.6 crore. The IPO consists of a fresh issue of 72.4 crore shares worth Rs 5,500 crore and an offer for sale of 8.49 crore shares aggregating Rs 645.6 crore by existing shareholders, according to the red herring prospectus.

The price band is set at Rs 72–76 per share, valuing the company at Rs 33,522 crore or about $4 billion—a steep discount from $5.4 billion at its last funding round in December 2023.

Founder Bhavish Aggarwal is offloading 3.8 crore shares, while investors SoftBank Group Corp. and Tiger Global are selling 2.4 crore and 65 lakh shares, respectively.

Axis Capital, BofA Securities Ltd., BoB Capital Markets, Citigroup India Global Markets, Goldman Sachs (India) Securities, ICICI Securities, Kotak Mahindra Capital and SBI Capital Markets are the book-running lead managers.

Ahead of its public issue, the electronic vehicle maker has raised Rs 2,763 crore from anchor investors, led by mutual funds. The issue closes for subscription on Aug. 6. The listing will take place on Aug. 9.

• Issue opens: Aug. 2.

• Issue closes: Aug. 6.

• Issue price: Rs 72 to Rs 76 per share.

• Fresh issue: Rs 5,500 crore.

• Offer for sale: Rs 645.6 crore.

• Total issue size: Rs 6,145.6 crore.

• Bid lot: 195 shares.

• Listing: BSE and NSE. 

The Bengaluru-based company specialises in electric scooters. It was founded in 2017 and apart from scooters, it also makes certain core components for electric vehicles, such as battery packs, motors, and vehicle frames at the Ola Future Factory.

The company focuses on developing vertically integrated technology and manufacturing capabilities for EV's and their components, including cells.

Ola Electric plans to use the proceeds from its IPO for several key initiatives.

The company will allocate Rs 1,227.6 crore towards capital expenditure, Rs 800 crore for the repayment of borrowings and Rs 1,600 crore for investment in research and development. Additionally, Rs 350 crore will be earmarked for expenditures aimed at organic growth. 

The IPO was subscribed 0.35 times, or 35% on Friday as of 5 pm.

• Qualified institutional buyers: Nil.

• Non-institutional investors: 0.20 times or 20%.

• Retail investors: 1.57 times.

• Employee reserved: 4.88 times.