Ola Electric, the prominent Indian electric scooter manufacturer backed by SoftBank, is gearing up to launch one of the largest IPOs in India this year. The company has set the price band for its shares at 72-76 rupees ($0.86-$0.91) per share.
The IPO, estimated to be worth approximately $740 million, marks a significant milestone as it will be the first public offering by an Indian electric vehicle maker. This development is expected to draw considerable attention from investors both domestically and internationally.
The offering will open for subscriptions from August 1 to 6, with the anchor round commencing on August 1 and the public offer starting on August 2. In a move likely to attract and benefit employees, the company has announced a 7-rupee per share discount for certain eligible employees participating in the IPO.
According to a report by Reuters, prominent investors such as Fidelity, Nomura, and Norges Bank, along with several Indian mutual funds, are expected to place bids, reflecting strong investor interest in the offering.
Ola Electric’s IPO will involve the issuance of new shares to raise $660 million, with existing investors, including founder Bhavish Aggarwal, selling shares worth about $80 million.
The proceeds from the IPO will be utilized to fund capital expenditure and research and development, which are crucial for the company’s growth and innovation in the electric vehicle sector. This strategic move aligns with the company’s vision to expand its market presence and enhance its product offerings.
The announcement of the IPO comes at a time when the adoption of clean vehicles in India is on the rise, albeit from a low base. Ola Electric has established itself as a key player in the e-scooter market, capitalizing on the growing demand for sustainable and eco-friendly transportation solutions. The company’s leadership in the sector, coupled with the increasing awareness and adoption of electric vehicles, positions it favorably for future growth.
A newspaper advertisement in the Financial Express provided further details about the IPO, highlighting that 10% of the offering will be reserved for retail investors.
This reservation is expected to encourage participation from individual investors, providing them with an opportunity to invest in a leading company within the burgeoning electric vehicle market. The inclusion of retail investors underscores Ola Electric’s commitment to broadening its investor base and fostering widespread support for its vision.
The IPO is not just a significant event for Ola Electric but also for the broader Indian stock market and the electric vehicle industry. It underscores the growing importance of sustainable transportation solutions and the potential for electric vehicles to transform the automotive landscape in India.
As the largest player in the Indian e-scooter market, Ola Electric’s public offering is likely to set a precedent for other companies in the sector, encouraging further investment and development.
The anticipation surrounding Ola Electric’s IPO is palpable, with market analysts and investors keenly watching the developments. The successful launch and subsequent performance of the IPO will provide valuable insights into investor sentiment and the market’s appetite for electric vehicle stocks. Moreover, it will signal the confidence of both domestic and international investors in the future of sustainable transportation in India.
