The initial public offering (IPO) of Ola Electric Mobility, valued at ₹6,145 crore, has witnessed a robust response from investors, culminating in a full subscription by the end of the second day of bidding on Monday, August 5, 2024. The IPO's success highlights strong market interest and confidence in the electric two-wheeler company’s future prospects.

IPO Subscription Overview

The Ola Electric IPO has been oversubscribed, receiving bids for 49,43,85,840 shares compared to the 46,51,59,451 shares available, translating into a subscription rate of 1.06 times. This marks a significant turnaround from the initial day’s performance, indicating growing investor confidence and interest.

Retail Individual Investors (RIIs) demonstrated strong enthusiasm for the IPO, with their category receiving a remarkable 2.87 times subscription. In contrast, the subscription for Non-Institutional Investors stood at 1.11 times, reflecting solid but slightly lower demand compared to retail investors. Qualified Institutional Buyers (QIBs), on the other hand, received a modest 40% subscription, while the employee portion of the IPO was substantially oversubscribed at 8.98 times, signaling strong internal support for the offering.

Day 1 Performance

On the first day of the bidding process, August 2, 2024, the IPO had only managed to secure 35% of its total offer, which was perceived as a lukewarm response. The lower initial interest raised concerns about the IPO’s overall success. However, the subsequent surge in subscriptions from retail and non-institutional investors showcased a strong rebound in interest.

IPO Structure and OFS Details

The Ola Electric IPO comprises an offer for sale (OFS) of 8.49 crore equity shares, valued at approximately ₹645.56 crore at the upper end of the price band. This OFS includes shares sold by Ola Electric’s founder, Bhavish Aggarwal, who will offload around 3.8 crore shares as part of the offering. The remaining portion of the IPO involves a new issue of equity shares worth up to ₹5,500 crore.

The OFS component, combined with the fresh issue of equity shares, aims to raise substantial capital for Ola Electric, enabling the company to further its expansion plans and strengthen its market position in the electric two-wheeler segment.

Market Sentiment and Future Outlook

The strong performance of the IPO on Day 2, driven by substantial retail and non-institutional demand, reflects positive market sentiment towards Ola Electric. The significant oversubscription in the employee category underscores the confidence of those closely associated with the company.

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With the IPO now fully subscribed, attention will shift to the final allotment and listing process. The final allotment of shares is expected to provide further insights into the distribution and investor participation in the offering.

The Ola Electric IPO represents a key event in the Indian capital markets, reflecting the growing interest in electric mobility and the company’s potential to capitalize on the burgeoning market for sustainable transportation solutions.

As the IPO progresses towards its closing date on August 8, 2024, investors and market watchers will be keenly observing the final outcomes and any further developments. The success of the IPO will likely influence future market trends and investor sentiment in the electric vehicle sector.

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