Ola Electric shares tank 8.5% as 3-month lock-in period expires

Shares of Bhavish Aggarwal-led electric vehicle company Ola Electric Mobility dropped over 7% today, hitting its lifetime low, as the three-month lock-in period expired. With the expiry of the lock-in period, around 18.2 crore shares, representing 4% of the total equity, are now eligible to be sold. At the current share price of ₹74.60, the scrip is trading below the IPO listing price of ₹76 apiece.

The scrip opened the gap down and hit the lifetime low of ₹73.70 on the BSE, 8.5% lower than yesterday’s closing, before recovering to ₹ 74.04. At the current share price, the scrip is trading 48% lower than its all-time high of ₹157.53 hit on August 20, 2024, while its m-cap stands at ₹32,838.63 crore.

A three-month lock-in period is a timeframe during which certain shareholders can't sell or transfer their shares. It is done to ensure stability and investor confidence. As a company goes public, certain investors, including insiders, employees or early investors, are not eligible to sell securities during the time the lock-in period is in force. This helps stabilise the share price.

Ola Electric shares were listed on exchanges on August 09, 2024, after receiving a lacklustre response for its IPO. The shares of India’s largest electric two-wheeler manufacturer were listed flat at ₹76 apiece.

The ₹6,146 crore IPO of Ola Electric, which opened on August 2, was subscribed 4.45 times, led by qualified institutional buyers (QIBs) as the quota reserved for them was booked 5.53 times. 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 issue for qualified institutional buyers, 15% for non-institutional bidders, and the 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 OFS. The minimum lot size for an application was 195 shares or ₹14,820.

Formed in 2017, Ola Electric Mobility is a wholly-owned subsidiary of ANI Technologies, the parent entity of Ola Cabs. Over the years, Bhavish Aggarwal-led company has become India's leading manufacturer of electric vehicles with the largest integrated and automated E2W manufacturing plant, spread across 400+ acres in Krishanagiri, Tamil Nadu.

It manufactures EVs and core EV components such as battery packs and motors at Ola Futurefactory, its manufacturing facility in Krishnagiri. The company is in the process of building an EV hub in the Krishnagiri and Dharmapuri districts in Tamil Nadu, India, which includes the Ola Futurefactory, upcoming Ola Gigafactory and co-located suppliers in the Krishnagiri district.

Ola Electric logged a net loss of ₹1,584.4 crore in the financial year 2023-24, from ₹1,472 crore in the previous fiscal. Revenue jumped 90.4% to ₹5,009.8 crore compared to ₹2,630.9 crore in the last fiscal.

The company will release its Q2 FY25 numbers on November 08, 2024.