From ₹76 to ₹146: Ola Electric shares nearly double in 6 sessions

Shares of Ola Electric Mobility, which made its market debut on August 9, have nearly doubled against its issue price in just six sessions, compared to 2.3% rise in the BSE benchmark Sensex during the same period.  The share price of Ola Electric has risen 92% in six trading days to touch a fresh high of ₹146 against the initial public offering (IPO) price of ₹76 apiece. The market capitalisation of the Bhavish Aggarwal-led EV company has risen by around ₹30,900 crore during the same period.

On Monday, Ola Electric shares opened higher for the third straight session at ₹139.15, against Friday’s closing price of ₹132.76. Extending opening gains, the auto stock surged 10% to hit its upper circuit limit of ₹146.03 on the BSE, while its market capitalisation climbed to ₹64,411.35. The shares of Ola touched its 20% upper circuit in 4 out of 6 sessions since its listing on the domestic bourses.

The BSE has revised the circuit limit of the company from 20% to 10% to stop any unduly rising of the stock price. The circuit limits ensure that the stock prices do not fluctuate beyond the prescribed level during a day.

The shares of Ola Electric made a flat debut at ₹76 on the exchanges on August 9, at par with the issue price. Post listing, the stock gained 20% to settle on the first day of trade at ₹91.20 apiece.

The ₹6,146 crore IPO of Ola, the second-largest after LIC of India's ₹21,000 crore issue in May 2022, received a muted response from investors as the issue was subscribed 4.45 times. The quota reserved for qualified institutional buyers (QIBs) was booked 5.53 times, while the retail portion was subscribed 4.05 times, followed by 2.51% in the non-institutional investors (NIIs) segment. The quota for the employee was the most subscribed by 12.38 times. The EV manufacturer had reserved 75% of the issues for qualified institutional buyers, 15% for non-institutional bidders, and remaining 10% for retail investors.

The issue comprised a fresh issue of ₹5,500 crore and an offer for sale (OFS) of up to 8.49 crore shares by promoters and existing shareholders. At the upper end of the IPO price band of ₹72-76 per share, the company raised ₹645.96 crore via an offer for sale. The minimum lot size for an application was 195 shares or ₹14,820.

Ola Electric Mobility, a wholly-owned subsidiary of ANI Technologies - the parent entity of Ola Cabs, intends to use capital raised from fresh equities for capital expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project and repayment of indebtedness incurred by subsidiary, OET. A part of the capital will be used for investment into research and product development, funding organic growth initiatives, and general corporate purposes.

Last week, global brokerage firm HSBC initiated coverage on Ola Electric with 'buy' call post its Q1 results. The brokerage firm believes that two-wheeler EV manufacturing costs may fall significantly by FY27-28, while internal combustion engine (ICE) scooters may go up due to emission standards.

For June quarter of FY25, Ola Electric posted a consolidated net loss of ₹347 crore, compared to a loss of ₹267 crore in the quarter ended June 30, 2023. Sequentially, the loss was down by 16% from ₹416 crore in the March quarter of 2024.

The company reported “highest-ever” quarterly consolidated revenue from operations at ₹1,644 crore, up 32% from ₹1,243 crore in Q1 FY24. On quarterly basis, the revenue slipped by 2.9% from ₹1,598 crore in Q4 FY24.

As per the earnings report, the June quarter witnessed the “highest-ever” deliveries of vehicles at 1,25,198 units as against 70,575 units delivered in the same period last year. “The company ramped up deliveries of its mass market scooter portfolio (S1 X portfolio) during the quarter which helped accelerate growth. The existing product portfolio (S1 Pro, S1 Air, S1 X+) also saw strong demand which continued growth momentum throughout the quarter.”

As per the regulatory filing, automotive segment (E2W) posted improvement in EBITDA margin at (1.97)%, up by 632 basis points from (8.29)% in Q1 FY24.

The adjusted gross margin stood at ₹377 crore for the quarter ended June 30, 2024, while margin stood at 21.94% of revenue, up 873 bps YoY. “The increasing scale of operations has benefited the company in the form of lower manufacturing costs and supply chain optimisations. 

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