Ola Electric’s stock price continued its upward trajectory on Monday, closing the session with a 15% gain. This surge builds on the momentum from Friday, when shares of the largest e-scooter manufacturer in India saw a significant jump, driven by robust investor demand and the country’s growing embrace of EVs.
On Friday, Ola Electric’s shares made their debut on the BSE at ₹75.99, a slight 0.01% dip from the IPO price of ₹76 per share. Despite the flat start, the stock quickly recovered, soaring by 19.97% to reach ₹91.18, the upper circuit limit for the day. Similarly, on the NSE, the stock opened at the issue price of ₹76 before rallying to ₹91.20, its upper circuit limit, marking a 20% gain.
The strong performance of Ola Electric’s shares reflects the high level of interest in the company, which has positioned itself as a key player in India’s rapidly expanding EV market.
The IPO, which concluded on August 6, attracted significant attention, with the ₹6,145-crore offering being oversubscribed 4.27 times on the final day of bidding. The price band for the initial share sale was set at ₹72-76 per share, and despite concerns of a discounted listing, the stock managed to defy expectations by closing substantially higher.
Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, noted that the initial fear of a discounted listing was quickly dispelled by strong buying activity post-listing.
Despite receiving demand well below street expectation, Ola Electric share price listed on a flat rate. The fear of discounted listing was out of woods, and huge buying was seen post listing. The long-term story is intact, and markets are focusing on news that Ola Electric Bike is to launch in India on August 15.
Prashanth Tapse
He advised risk-tolerant investors to hold onto their shares with a minimum holding period of 2-3 years and to consider accumulating more shares on any price dips to participate in the company’s long-term growth journey.
The enthusiasm surrounding Ola Electric’s stock is also fueled by the company’s ambitious plans for the future. From the proceeds of its ₹5,500-crore public offering, Ola Electric Mobility Ltd intends to invest ₹1,227.6 crore in expanding the capacity of its cell manufacturing facility from 5 GWh to 6.4 GWh.
Additionally, the company plans to allocate ₹1,600 crore for product development and research, ₹800 crore for debt repayment, and ₹350 crore for organic growth efforts. These strategic investments are expected to strengthen Ola Electric’s position in the EV market, enabling it to meet the growing demand for electric mobility solutions in India.
The company’s expansion plans are further underscored by the establishment and growth of the Ola Gigafactory in Krishnagiri, Tamil Nadu. According to the company’s Red Herring Prospectus (RHP), the expansion will be financed through a combination of internal accruals and long-term borrowings made available by its subsidiary, Ola Cell Technologies Pvt Ltd (OCT).
Phases 1 (a) and 1 (b) of the Gigafactory project are already underway, and the company is expected to scale up production capacity significantly as it completes these phases.
As Ola Electric gears up for the launch of its electric bike in India on August 15, market participants are closely watching the stock’s performance, anticipating further gains as the company continues to capture market share in the burgeoning EV sector. With strong investor interest and a clear roadmap for growth, Ola Electric appears well-positioned to maintain its upward momentum.
Looking ahead, the company’s board meeting scheduled for August 14, 2024, will be a key event, as it will consider and approve the unaudited standalone and consolidated financial results for the quarter ended June 30, 2024. Investors will be keenly interested in these results, which are expected to provide further insights into the company’s financial health and growth prospects.
For now, Ola Electric’s shares are riding high on the wave of optimism surrounding the future of electric mobility in India. As the company continues to innovate and expand, it remains a stock to watch in the Indian market.
