Ola Electric Mobility Ltd’s shares have surged by 17% following a modest initial public offering (IPO) debut. This significant increase has propelled Bhavish Aggarwal, the company’s promoter, into India’s billionaire category. With his pre-listing stake of 1,36,18,75,240 shares, representing a 36.94% ownership, Aggarwal’s valuation has reached Rs 12,104 crore (approximately $1.44 billion).
Before the IPO, Bhavish Aggarwal sold 37,915,211 shares at Rs 76 each, totaling Rs 288 crore. After the IPO, he retained 1,32,39,60,029 shares. At the IPO’s intraday high of Rs 89.25 per share, these remaining shares are valued at Rs 11,816 crore.
Despite a lower-than-expected demand, Ola Electric’s shares listed higher than anticipated. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, stated, “Despite receiving demand well below Street expectations, OLA listed well above the Street expectations. Post-listing, the short-term view remains cautious due to weak financials and the risk of negative cash flows in the future.” Tapse recommended that investors understand the risks involved and consider holding their shares for 2-3 years if they are prepared for potential volatility.
Ola Electric’s IPO, running from August 2 to August 6, debuted flat at Rs 76 per share, matching the issue price. On the Bombay Stock Exchange (BSE), the stock listed at a minor discount of 0.01%, at Rs 75.99. The IPO was priced between Rs 72-76 per share and raised Rs 6,145.56 crore, comprising a fresh share sale of Rs 5,500 crore and an offer-for-sale (OFS) of up to 8,49,41,997 shares.
The issue was subscribed 4.27 times overall, with qualified institutional bidders (QIBs) subscribing 5.31 times, non-institutional investors 2.40 times, and retail investors and employees 3.92 times and 11.99 times, respectively.
Founded in 2017 and based in Bengaluru, Ola Electric Mobility is a prominent player in the electric vehicle sector. The company specializes in manufacturing electric vehicles and essential components, such as battery packs, motors, and vehicle frames, at its Ola Futurefactory.
Ola Electric's impressive 17% stock rally has catapulted Bhavish Aggarwal into India's billionaire club, with his net worth reaching $1.44 billion. This financial milestone underscores the company's significant market presence and the successful outcome of its IPO. Despite the initial flat listing, Ola Electric's shares have performed remarkably well, reflecting strong investor confidence and interest. As the company continues to grow and innovate in the electric vehicle sector, Aggarwal's newfound billionaire status is a testament to the potential and promise of Ola Electric in the evolving market landscape. Looking ahead, while there are risks associated with the company's financials, the long-term outlook remains optimistic, supported by robust demand and strategic market positioning.