Ola Electric's shares surge in debut, valuing company at USD 4.4 billion

Ola Electric Mobility, backed by SoftBank, made a strong debut in the stock market on Friday, with its shares soaring 10% on their first trading day. This initial public offering (IPO) has valued the company at 369.45 billion rupees, equivalent to USD 4.40 billion. This marks India's largest IPO of an electric vehicle manufacturer to date.

The stock, listed at INR 76 on the National Stock Exchange (NSE), started off flat relative to its offering price but gained momentum as trading progressed. The IPO, which raised USD 734 million, was heavily oversubscribed, attracting bids totaling around USD 1.8 billion.

Ola Electric, which commands a dominant 39% market share in India's electric scooter sector, launched its first model just three years ago. Despite its rapid growth, with sales increasing by 90% year-over-year as of March 2024, the company has yet to achieve profitability. During this period, its losses also expanded by 8%.

The company intends to allocate approximately USD 660 million from the IPO proceeds toward research and development and establishing its battery cell manufacturing unit. Ola Electric’s strategy involves reducing costs and improving affordability by producing its own battery cells, with commercial production expected to begin by early 2025.

This ambitious move is central to Ola Electric's plans to enhance its market position and drive future profitability.