Ola Electric IPO Off to a Strong Start; Should you Subscribe?

Electric scooter manufacturer Ola Electric has kicked off its much-anticipated initial public offering (IPO) today, with early indications pointing to a strong start. The company, backed by tech giant SoftBank, is looking to raise a substantial ₹6,146 crore through the sale of shares.

The IPO, which will remain open for subscription until August 6, has already garnered significant interest from institutional investors. Prior to the retail launch, Ola Electric secured ₹2,763 crore from large investors, demonstrating robust confidence in the company's growth prospects.

The electric two-wheeler market leader is aiming for a valuation of $4 billion and plans to utilize the IPO proceeds for expanding its manufacturing capacity, research and development, and strengthening its distribution network.

While analysts are bullish on Ola Electric's market leadership and innovative capabilities, they also caution about the company's current investment phase and the need to achieve profitability in the future.

As the IPO unfolds, market observers will be closely watching the subscription levels from retail investors to gauge the overall investor sentiment towards the electric vehicle sector in India.

Here's a breakdown of the key points:

• Big institutions flocked to the IPO, submitting bids exceeding $2 billion. This strong demand surpassed the $330 million quota allocated for them.
• SoftBank-backed Ola Electric is aiming to raise $734 million, making it the largest IPO in India this year.
• Investors like Nomura, Norges Bank, SBI Mutual Funds, and HDFC Mutual Funds secured shares in the offering.
• Retail investors and eligible employees can now participate in the IPO between August 2nd and 6th. The price band is set at ₹72-₹76 per share.
• Ola Electric is a market leader in electric two-wheelers and is targeting a valuation of $4 billion.
• Despite strong investor interest, some analysts caution that the company hasn't yet turned a profit.