Ola Electric: Investors’ enthusiasm for this year’s biggest IPO, Ola Electric, is suddenly waning. The subscription of this IPO of more than Rs 6145 crore was open to the general public from August 2 and its last date is today i.e. August 6. Its gray market price (GMP) was around Rs 16 before the subscription opened, which has now come down to Rs 4. Due to its sluggish subscription, it is feared that investors are not going to get much benefit on its listing.
The price band of the IPO is between Rs 72 and Rs 76
Ola Electric has kept the price band of the IPO between Rs 72 and Rs 76 per share. According to the Business Standard report, looking at the GMP, it is being estimated that its listing can be around Rs 80. The company has launched a fresh issue of Rs 5500 crore and an offer for sale of about Rs 645 crore in the market. But, only 35 percent of it was subscribed on the first day. Till Monday, only 72 percent of it was subscribed. Now investors’ eyes are fixed on Tuesday.
IPO listing to be held on 9th August
The portion reserved for retail investors has been subscribed 2.61 times. The portion reserved for non-institutional investors (NII) has been subscribed 81 percent and the portion reserved for employees has been subscribed 8.38 times. This is the first IPO brought by an Indian electric vehicle manufacturer. SEBI had given approval to Ola Electric to bring IPO only last month. The IPO may be listed on 9 August.
The IPO came at a lower valuation than the funding round
Many brokerage firms have also given different opinions about this IPO. They have expressed concern about the company’s low business and high valuation. This is the reason why Ola decided to bring this IPO at a lower valuation than the valuation received during the last funding round. Ola Electric suffered a net loss of Rs 1,584.40 crore in FY 2024. Through the IPO, the company’s CEO Bhavish Aggarwal will sell 3.8 crore shares. With the money from the IPO, the company will expand its manufacturing plant. Apart from this, Rs 1600 crore will be spent on research and product development and Rs 800 crore will be spent on repaying the loan.
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