Ola Electric IPO subscription details on day 2

5 Aug 2024 , 12:15 PM

The initial public offering (IPO) of Ola Electric Mobility Ltd commenced on August 2, 2024, and will close on August 6, 2024. This highly anticipated IPO marks a significant milestone as it represents the first-ever listing of an electric two-wheeler company on Indian exchanges, making it one of the largest IPOs of the year in India.

Subscription Status

As of the second day of bidding, the IPO has seen a mixed response:

• Retail Quota: Subscribed 2.48 times
• Non-Institutional Investors (NII) Category: Subscribed 0.70 times
• Overall Subscription Rate: 0.66 times

IPO Details

• Price Range: ₹72 to ₹76 per share
• Subscription Period: August 2 to August 6, 2024
• Share Allotment Date: August 6, 2024
• Listing Date: August 8, 2024 (on both BSE and NSE)

Issue Composition

The IPO consists of a fresh issue of equity shares amounting to ₹5,500 Crore and an offer for sale (OFS) of 8.49 Crore equity shares valued at ₹645.56 Crore by promoters and investors. The total issue size is ₹6,145.56 Crore.

Anchor Investment

On August 1, Ola Electric secured ₹2,763 Crore from anchor investors just before the public subscription opened. This substantial anchor investment underscores the strong market interest in Ola Electric’s IPO.

Investment Details

Investors are required to apply for a minimum of 195 equity shares, amounting to a minimum investment of ₹14,820 at the upper price band of ₹76 per share.

Offer for Sale (OFS)

Founder Bhavish Aggarwal will offload approximately 3.8 Crore shares through the OFS. The funds raised from the IPO will be used to enhance cell manufacturing capacity and advance research and development for future technologies.

Utilization of IPO Proceeds

Ola Electric plans to allocate the IPO proceeds as follows:

• Cell Manufacturing Capacity: ₹1,227.6 Crore to increase capacity from 5 GWh to 6.4 GWh
• Research and Development: ₹1,600 Crore
• Debt Repayment: ₹800 Crore
• Organic Growth Initiatives: ₹350 Crore

Expansion Plans

The company’s prospectus highlights that Phase 1(a) and Phase 1(b) of the Ola Gigafactory expansion in Krishnagiri, Tamil Nadu, will be funded through internal accruals and long-term borrowings by Ola Cell Technologies Pvt Ltd (OCT). A portion of the IPO proceeds will also be used for capital expenditure to expand the cell manufacturing plant’s capacity.