Ola Electric, a prominent player in the electric vehicle (EV) sector, has announced its initial public offering (IPO) with a price range of INR 72-76 per share. The IPO is scheduled to open for bidding on Friday, August 2.
At the highest price point, Ola Electric is poised to raise more than INR 6,145.6 crore. The IPO will include a fresh issuance of shares valued up to INR 5,500 crore, alongside an offer-for-sale of up to 8.49 crore shares worth INR 645.6 crore. The subscription period for the IPO will end on August 6.
The IPO process begins with anchor bidding on August 1. Investors can bid in lots of 195 shares. The distribution of shares will be allocated as follows: 75% for qualified institutional buyers (QIBs), 10% for retail investors, and 15% for non-institutional investors (NIIs).
Should the IPO succeed, Ola Electric will become the first electric two-wheeler (E2W) manufacturer to be listed on Dalal Street. This marks a significant milestone, as most of its listed competitors are internal combustion engine (ICE) manufacturers. The company's performance will be keenly observed in comparison to these established names.
Currently, Ola Electric's market capitalization is set to be the smallest among industry giants like Bajaj Auto, Eicher Motors, TVS Motors, and Hero MotoCorp. The company's revenue for FY24 stands at INR 5,010 crore, a fraction of what its larger counterparts achieve. Ola reported a net loss for FY24 and has been struggling with cash flow issues, moving from a net cash positive position in FY22 to net debt by FY24. In contrast, its competitors maintain healthier profitability, with EBITDA margins ranging from 14% to 33%.
Despite these challenges, Ola Electric holds a significant advantage if the future of two-wheeler transportation leans towards electric solutions. In FY24, Ola delivered approximately 3.3 lakh units, capturing a 35% market share, which surpasses the combined market share of its listed competitors.
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