Ola Electric's IPO Sees Overwhelming Response with 4.27x Subscription

Ola Electric Mobility's Rs 6,145-crore initial public offering (IPO) garnered 4.27 times subscription by its final bidding day. The IPO includes a fresh issue worth Rs 5,500 crore and an Offer for Sale. Funds raised will be used to enhance manufacturing capabilities and invest in research and development.

Ola Electric Mobility's Rs 6,145-crore initial public offering (IPO) saw overwhelming demand, receiving 4.27 times the subscription on the final day of bidding, according to NSE data.

The share sale, which included both new issues and an Offer for Sale (OFS), received bids for 1,98,79,03,905 shares, significantly surpassing the 46,51,59,451 shares on offer. Notably, Qualified Institutional Buyers (QIBs) showed strong interest, with their category receiving 5.31 times the subscription, while Retail Individual Investors (RIIs) subscribed 3.92 times their allotted portion. Non-institutional investors also showed considerable interest with a 2.40 times subscription rate.

The IPO featured a fresh issue totaling up to Rs 5,500 crore and an OFS of up to 8,49,41,997 equity shares. The price range for the offer was set between Rs 72-76 per share. Notably, Ola Electric's founder, Bhavish Aggarwal, is offloading approximately 3.8 crore shares via the OFS.

Funds acquired from the IPO will be strategically utilized to expand cell manufacturing capacity, enhance research and product development, repay debts, and fuel organic growth. Specifically, Rs 1,227.6 crore will be invested in expanding their cell manufacturing plant's capacity from 5 GWh to 6.4 GWh, while another Rs 1,600 crore will be allocated to R&D. The company also plans to use Rs 800 crore to settle debts and Rs 350 crore on organic growth initiatives.

Ola Electric disclosed that the initial phases of its Ola Gigafactory expansion in Tamil Nadu will be funded through both internal accruals and long-term borrowings facilitated by its subsidiary, Ola Cell Technologies Pvt Ltd, while part of the proceeds will cover the capital expenditure.

Earlier, on Thursday, anchor investors including SBI Mutual Fund, HDFC Mutual Fund, and Goldman Sachs, among others, invested Rs 2,763 crore.

The offer is being managed by prominent financial institutions including Kotak Mahindra Capital Company, Citigroup Global Markets India, BofA Securities India, and others.

(With inputs from agencies.)