Ola Electric IPO subscribed just 4.3 times

The public issue of Ola Electric Mobility, the first pure EV company to hit the capital market, saw a moderate response from investors. The IPO was subscribed 4.27 times with qualified institutional investors and retail investors showing more interest, as their respective portion was subscribed 5.31 times and 3.92 times. However, HNIs (non-institution investors) remained somewhat muted, as the portion reserved for them saw bids for 2.40 times.

The ₹6,145.6-crore IPO, that came out with a price band of ₹72-76, comprised a fresh issue of ₹5,500 crore and an offer-for-sale (OFS) of ₹645.60 crore. Ola co-founder Bhavish Aggarwal offloaded 3.79 crore shares, and promoter group Indus Trust sold 41.79 lakh shares in the OFS.

The company had also reserved shares for its employees, who will get a discount of ₹7 a share. The employees portion was the most aggressive as that window was subscribed 12 times.

Earlier, as part of the IPO, Ola had mobilised ₹2,763 crore from anchor investors. The anchor round saw participation from a host of investors who included SBI Mutual Fund (MF), HDFC MF, Nippon India MF, Sundaram MF, Bandhan MF, Bharti Axa Life Insurance Company, Kotak Mahindra Life Insurance Company, Government Pension Fund Global, Nomura India Investment Fund, Goldman Sachs (Singapore) Pte Ltd and Fidelity. 

Utility of funds

Funds raised will be used for expansion of the installed capacity of the Ola Giga factory from 5GWh to 6.4GWh; repayment or pre-payment, in full or in part, of Ola Electric Technologies, its material subsidiary, working capital borrowings; investment in research and product development, including investments in property, plant and equipment and intangible assets; organic growth initiatives; and general corporate purposes.

Ola Electric Mobility Ltd is a pure EV player in India and is building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. It manufactures EVs and certain core EV components like battery packs, motors and vehicle frames at the Ola Future factory. The company focuses on capturing the opportunity arising out of electrification of mobility in India and also seek opportunities to export its EVs in select international markets in the future.