On Friday, Ola Electric Mobility’s shares surged by 20% on their trading debut in Mumbai, India, highlighting growing investor confidence in the electric vehicle (EV) sector. The stock, initially listed at its IPO price of ₹76, quickly rose to ₹91.20, pushing the company’s valuation to an impressive $4.8 billion. This surge reflects a broader optimism about the future of electric vehicles in India, the world’s largest two-wheeler market.
The company’s $734 million IPO stands as India’s largest in 2024, underscoring the significant interest in the EV market. As the leading player in India’s burgeoning electric scooter market, Ola Electric commands a 39% market share as of July despite the relatively low but rapidly increasing adoption of EVs in the country. This growth aligns with the Indian government’s push for clean energy solutions under Prime Minister Narendra Modi’s leadership.
Analysts attribute the stock’s strong debut to the rising interest in EVs and improving market sentiment. The broader Nifty 50 index also saw gains, rebounding by about 1.3% over four sessions. “Despite receiving demand below street expectations, Ola Electric’s listing exceeded expectations, driven by the positive market mood,” commented Prashanth Tapse, Senior Vice President of Research at Mehta Equities.
Ola Electric’s plans to expand into the motorcycle segment, which represents two-thirds of India’s two-wheeler market, have further fueled investor optimism. The company is expected to launch its range of electric motorcycles next week, a move that could significantly boost its market presence.
However, despite the company’s soaring revenues, profitability remains a challenge. In the fiscal year ending March, Ola Electric saw a 90% increase in sales, but its losses widened by 8%. The company plans to use about $660 million from its IPO proceeds to invest in research and development and its battery cell manufacturing unit, aiming for commercial production by early 2025.
“Ola Electric is in a very aggressive growth phase where we are investing for future growth,” stated Bhavish Aggarwal, founder of Ola Electric, emphasizing the company’s focus on long-term profitability. As Ola Electric continues to expand and innovate, its successful market debut signals strong investor confidence in the future of electric vehicles in India.
