With a 39% market share, Ola Electric dominates sales of electric scooters in India, after launching its first model just three years ago. 
| Photo Credit: Reuters

SoftBank-backed Ola Electric Mobility’s shares rose 10% in their trading debut on Friday (August 9, 2024), valuing the company at ₹369.45 billion ($4.40 billion) after the first stock offering by a pure-play electric vehicle maker in India.

The stock had listed flat to its initial offer price at ₹76 on the National Stock Exchange in a broader market that was up 1%. Ola Electric’s $734 million initial public offering, India’s biggest so far in 2024, drew about $1.8 billion in bids this week.

With a 39% market share, Ola Electric dominates sales of electric scooters in India, after launching its first model just three years ago. However, while Ola’s revenues have soared, it is yet to report a profit.

In the year to the end of March 2024, the company’s sales grew 90% from the previous year, but its losses widened by 8%.

The company, whose share from the IPO was about $660 million, is planning to invest most of the proceeds in research and development and its battery cell manufacturing unit.

Ola Electric has pinned its profitability on manufacturing its own battery cells for its scooters, which should make them more affordable. It is targeting commercial production of the battery cells by early 2025.

Ola Electric’s S1 Air e-scooters are pictured inside its manufacturing facility in Pochampalli, Tamil Nadu. The company plans to launch its IPO next week.
| Photo Credit: Reuters

SoftBank-backed Ola Electric’s IPO will open for retail subscription on Aug. 2, the electric scooter maker said on July 27, 2024, a stock offering that according to two sources will value the company between $4.2 billion to $4.4 billion.

The issue, which will open for institutional investors a day earlier on Thursday, will close for retail subscriptions on Aug. 6, the final IPO prospectus filing showed. Ola founder Bhavish Aggarwal will offload 37.9 million shares in the IPO, around 20% lower than estimated in the draft IPO prospectus.

Ola’s expected valuation is about 18.5% to 22% lower than in its last funding round in September, which was led by Singapore’s investment firm Temasek and valued the country’s largest e-scooter maker at $5.4 billion.

“Some marquee investors are being offered the IPO at the lower end of the $4.2 billion-$4.4 billion valuation,” said one of the sources with direct knowledge of IPO planning.

Ola is planning the IPO at a lower valuation to ensure higher participation from investors bidding for the IPO shares, the two sources said.

Ola Electric’s IPO, a first for an Indian EV maker, is also one of the biggest in a year where the country’s equities markets have scaled multiple record highs and also overtaken Hong Kong to become the world’s fourth-largest bourse.