Institutional investors show strong interest in Ola IPO

• Indian Electric scooter maker plans to raise $734m while the quota for big institutions was set at $330m and allocation was completed on August 1.
• The opening of the IPO to retail investors and eligible employees on Friday, with a closing date of Tuesday.
• Ola Electric share price expected to be listed on BSE and NSE on August 9.

Ola Electric, the SoftBank-backed Indian electric scooter manufacturer, commenced its IPO with bids worth over $2 billion from institutional investors.

Set to be the largest IPO in India this year, the demand highlights the confidence in Ola Electric’s growth potential and its ability to capitalise on the surging EV market in India.

Indian Electric scooter maker Ola, plans to raise $734 million while the quota for big institutions was set at $330 million and allocation was completed on Thursday.

Notably, prominent players like Nomura, Norges Bank, and several Indian mutual funds have secured allocations, indicating a strong belief in the company’s long-term prospects.

Leading Indian mutual funds, including SBI and HDFC Mutual Funds, have been allocated shares worth $30-$36 million each, while Nomura and Norges Bank were allocated around $24 million each.

IPO structure

The IPO structure, with 75 per cent of the shares reserved for QIBs, 15 per cent for non-institutional institutional investors, and 10 per cent for retail investors, reflects a strategy to balance institutional backing with retail participation.

The structure ensures significant support from established investors while also fostering retail interest in the company’s journey.

The firm, founded by Bhavish Aggarwal, is offering shares in the range of Rs72-Rs76 per share, targeting a valuation of $4 billion.

Opportunity for investors

The valuation reflects the company’s ambitious growth trajectory and its position as a key player in the Indian EV market. Ola Electric is leveraging its existing brand recognition and strong customer base in the ride-hailing sector to penetrate the burgeoning electric scooter market.

Furthermore, the Offer for Sale component of the IPO, where founder Bhavish Aggarwal will sell around 3.8 crore shares, highlights the opportunity for investors to acquire a stake in the company’s success.

The opening of the IPO to retail investors and eligible employees on Friday, with a closing date of Tuesday, marks a crucial stage in the process.

The level of participation from retail investors will provide further insight into public sentiment towards the company and its future prospects.

With the Ola Electric share price expected to be listed on BSE and NSE on Friday, August 9th, the IPO’s success will be closely watched. This event will be a landmark moment for the Indian EV sector and could set a precedent for other electric vehicle companies looking to access public markets.