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Ola Electric List at Par, Then Jumps 20% to Surprise Investors

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Synopsis:

Ola Electric shares initially listed flat at ₹76, however, in a short span of time it surged 20% to ₹91.18. The Ola Electric IPO successfully raised ₹6,146 crore, with funds earmarked for R&D and innovation in the EV sector. The IPO was subscribed 4.27 times overall.

Ola Electric Shares Make Flat Debut on Dalal Street

Ola Electric Mobility’s shares had a subdued debut on Dalal Street, listing at ₹76 on the National Stock Exchange (NSE) and at ₹75.99 on the Bombay Stock Exchange (BSE). This flat listing soon turned around dramatically and gained almost 20% till 01:45 PM. 

Market Expectations

Ahead of the listing, market speculation was rife about a potential discount. Ola Electric Share Price were trading at a discount of ₹3 in the grey market, hinting at a possible erosion of 4% of investor capital. Contrary to these expectations, the stock managed to list at par and then surge significantly, providing some relief to investors.

IPO Details

The Ola Electric IPO was open for bidding from August 2 to August 6, 2024. The EV-focused company offered its shares in a fixed price band of ₹72-76 per share, with a lot size of 195 shares.

Despite the dry market sentiment, the company successfully raised ₹6,145.56 crore from the IPO, which included a fresh issue of ₹5,500 crore and an Offer-for-Sale (OFS) of up to 8.49 crore shares by existing shareholders.

Subscription and Investor Response

The IPO witnessed an overall subscription of 4.27 times. The quota for Qualified Institutional Bidders (QIBs) saw the highest interest, being subscribed 5.31 times. The Non-Institutional Investors (NIIs) quota was subscribed 2.40 times, while the portions reserved for retail investors and employees were subscribed 3.92 times and 11.99 times, respectively.

Fund Allocation and Future Prospects

Ola Electric has earmarked ₹1,600 crore from the net proceeds for investment in research and development. This significant allocation underscores the company's commitment to advancing innovation within the rapidly growing electric vehicle (EV) sector. The funds will likely be used to develop new technologies and enhance the company’s EV offerings, positioning it as a competitive player in the market.

Key Takeaways

Despite a challenging market environment, Ola Electric’s initial flat listing and then a turnaround, was better than anticipated, especially given the grey market discounts. The successful raising of ₹6,146 crore through the IPO marks a significant milestone for the company as it continues to drive innovation in the EV sector.

Investors and market watchers will closely monitor Ola Electric’s share price and the company’s progress, particularly its R&D initiatives, as it navigates the competitive landscape of the electric vehicle market.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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