Shares of Ola Electric Mobility Ltd. experienced a decline of over 7% in early trading on August 14, 2024, as investors engaged in profit booking ahead of the company’s Q1FY25 results announcement scheduled for later that day. The stock, which debuted on the National Stock Exchange (NSE) at ₹76 on August 9, had seen significant volatility, reaching an upper circuit limit of 20% on both its listing day and August 12. However, it closed the previous session on August 13 with a slight decline of nearly 1%.
Current Trading Status At around 10:00 AM, Ola Electric’s shares were trading approximately 3% lower at ₹105. The stock had previously peaked at ₹129.4, reflecting a nearly 70% increase from its IPO price, before facing selling pressure that led to its current downturn. Analysts attribute this fluctuation to a combination of profit-taking by investors and uncertainty surrounding the company’s financial performance, particularly given its history of losses and the competitive electric vehicle (EV) market landscape.
Upcoming Financial Results Ola Electric is set to conduct its first board meeting post-listing on August 14, where it will review and approve its unaudited standalone and consolidated financial results for the June quarter. This meeting is particularly significant as it marks a crucial moment for the company to address investor concerns regarding its financial health and future profitability.
IPO Overview The company’s IPO, which launched on August 2 and closed on August 6, raised ₹6,145.6 crore, consisting of a fresh issue of 72.37 crore shares totaling ₹5,500 crore and an offer for sale of 8.5 crore shares amounting to ₹645.6 crore. The IPO was priced between ₹72 and ₹76 per share, with a minimum lot size of 195 shares. Despite the hype surrounding the IPO, it was only 4.26 times subscribed, falling short of market expectations. Major anchor investors included Nomura, HDFC Mutual Fund, and SBI Mutual Fund.
Product Launch In addition to the financial results, Ola Electric is preparing to unveil its first electric motorcycle on August 15, coinciding with India’s Independence Day. Although specific details of the motorcycle have not been disclosed, the company has been developing various models, including the Diamondhead, Adventure, Roadster, and Cruiser, which were revealed in concept form last year. This launch is anticipated to bolster the company’s position in the competitive EV market and may influence investor sentiment positively.
Future Outlook Despite the initial excitement surrounding its IPO and stock performance, analysts caution investors about the risks associated with Ola Electric. The company has faced criticism for its past negative cash flows and ongoing losses, which could impact its financial stability in the long term. Investors are advised to approach the stock with caution, given the current market conditions and the company’s financial trajectory.
Ola Electric has made a significant entry into the stock market and is poised for product launches, the immediate future appears uncertain as it navigates investor expectations and financial challenges. The upcoming board meeting and financial results will be pivotal in shaping investor confidence and the company’s strategic direction moving forward.
