Ola Electric, an Indian electric vehicle manufacturer, experienced a significant surge in its stock price by 20% during its initial public offering (IPO) debut. This positive market performance can be attributed to the growing optimism surrounding the electric vehicle industry and the company’s strong growth potential.


Ola Electric Mobility’s shares experienced a significant surge of 20% during their trading debut in Mumbai on Friday. This positive market response resulted in the company’s valuation reaching $4.8 billion. Investors demonstrated their confidence in the growing adoption of electric vehicles within India, the world’s largest market for two-wheelers.

Initially, the stock had a flat listing at its initial public offering (IPO) price of 76 rupees. However, it subsequently rose to 91.20 rupees, outperforming the broader market which experienced a modest gain of 1%.

Ola Electric’s $734 million IPO stands as the largest in India for the year 2024. The company holds a leading position in a country where the adoption of electric vehicles is still relatively low but is witnessing a steady increase. This growth is driven by the Indian government’s active promotion of clean energy, spearheaded by Prime Minister Narendra Modi.

The Improving sentiment in the stock market contributed to the recent gains, as observed by analysts. The Nifty 50 index has demonstrated a notable recovery of approximately 1.3% over the past four trading sessions, following a significant decline of 2.7% on Monday due to concerns regarding a potential recession in the United States.

"Despite receiving demand well below street expectation, Ola listed well above street expectations, which can be attributed to market mood," said Prashanth Tapse, senior vice president of research at Mehta Equities.

As of July, Ola Electric holds a commanding 39% market share in the electric scooter segment in India, having introduced its inaugural model merely three years prior.

Analysts have noted that investors are optimistic regarding Ola Electric's expansion into the motorcycle sector, which represents two-thirds of the two-wheeler market in India. The company is anticipated to unveil its lineup of electric motorcycles in the coming week.

"The flat opening seems to have encouraged investors who weren't allotted shares in the IPO to hop on, and they seem to be optimistic of Ola's motorcycle launch," said Varun Baxi, lead analyst at Nirmal Bang Institutional Equities.

Despite Ola’s impressive revenue growth, profitability remains elusive. In the fiscal year ending March, the company experienced a 90% year-over-year increase in sales, yet losses expanded by 8%.

"Our focus will be to build profitable growth for investors to also feel that there is a long term profitability journey here also," Ola Electric's founder Bhavish Aggarwal told CNBC-TV18 on Friday after ringing the bell at the NSE stock exchange.

The organization, which anticipates receiving approximately $660 million in Initial Public Offering (IPO) proceeds, intends to allocate a substantial portion of these funds towards research and development initiatives, as well as its battery cell manufacturing division.

Ola Electric’s profitability strategy is centered around the internal manufacturing of battery cells for its scooters, which is anticipated to improve affordability. The company intends to initiate commercial production of these battery cells in early 2025.

"Ola Electric is in a very aggressive growth phase ... where we are investing for future growth," Aggarwal said.