Ola Electric IPO: This investor is set for 800% returns
What's the story
Ola Electric, India's leading electric two-wheeler manufacturer, is gearing up for its much-anticipated Initial Public Offering (IPO) of over ₹6,100 crore. This IPO is poised to be the biggest in India this year, and it's bringing a windfall for some of the company's early investors. The company has set the issue price between ₹72-76 per share, which values it at approximately ₹33,522 crore at the upper end. This is also the first IPO by an Indian electric vehicle maker.
Investor gains
Early investors poised for significant returns
Two early investors in Ola Electric, Tiger Global and Z47 (formerly Matrix Partners India), stand to make substantial returns from this IPO. Tiger Global, which acquired its shares at ₹11.70, is projected to see a return on investment of approximately 550%. The firm plans to sell about 63.6 lakh shares under the Offer for Sale (OFS), potentially earning a profit of ₹49 crore.
Mixed outcomes
Z47 set for massive returns, some investors to incur losses
Z47 has a weighted average acquisition price of ₹8.22 per share and is expected to make a significant return on investment of 824% through the public offer. The venture capital fund plans to offload about 37.27 lakh shares through the OFS, potentially earning a profit of over ₹28 crore. However, Alpine Opportunity Fund VI and Tekne Private Ventures, which acquired shares at higher prices, are likely to incur losses under the OFS.
Bidding details
Ola Electric IPO opens amid market boom
The IPO will open for bidding on August 2 and will be available for subscription until August 6. It comprises a fresh issue of ₹5,500 crore and an OFS of up to 84.94 million shares. The offering comes during a stock market boom in India, with over 150 companies raising nearly $5 billion through public listings between January and July.
Financial performance
Ola Electric's revenue surge and future plans
Ola Electric's operating revenues saw a 90% increase in FY24 to ₹5,009 crore due to a surge in e-scooter sales. Despite this growth, the company's losses have widened due to rising expenses such as research, technology, and other costs. The company has committed to spend around ₹1,600 crore from its IPO proceeds on research and development.