The recent debut of Ola Electric Mobility’s shares has been the talk of the town in trading circles. Amidst the fanfare and high expectations, the electric vehicle (EV) pioneer’s shares experienced a rollercoaster ride, defying the initial flat listing and ultimately showcasing a remarkable surge in trading.
Ola Electric’s flat listing and subsequent surge
The much-anticipated listing of Ola Electric Mobility on the Indian stock exchanges, BSE and NSE, began with a somewhat underwhelming start. The shares were listed at the issue price of ₹76, a mere 0.01% discount from the upper price band. However, the flat listing did not deter the enthusiasm of Dalal Street bulls, who quickly pounced on the opportunity.
Within minutes of the trading opening, Ola Electric’s shares witnessed a surge, reaching a high of ₹87.43 on the NSE, a remarkable 15% jump from the listing price. Eventually, it touched an intraday high of ₹90.88 per share on the NSE. The trading volume also witnessed a significant spike, soaring from Rs. 6 crore to over Rs. 34 crore within the first hour of the debut.
The strong buying interest and the surge in trading volume can be attributed to the influx of institutional investors. According to stock market experts, the decisive spurt in trade volume signals a strong buzz among these institutional players, who have been eagerly awaiting the opportunity to invest in Ola Electric.
The institutional investors’ enthusiasm is further underscored by the fact that the IPO, which was valued at ₹6,146 crore, managed to garner a subscription of only 4.26 times, falling short of market expectations. Nevertheless, the institutional investors have demonstrated their confidence in Ola Electric’s potential, driving the stock’s performance on the opening day.
The road ahead for Ola Electric
Ola Electric’s financial performance has been a subject of much scrutiny. While the company has reported a significant increase in revenue from operations, reaching ₹5,009.8 crore in fiscal 2024 from ₹2,630.9 crore in fiscal 2023, its losses have also widened during the same period.
The company’s loss stood at ₹1,584.4 crore in fiscal 2024, up from ₹1,472 crore in fiscal 2023. This widening of losses has raised concerns about Ola Electric’s financial stability, especially as it navigates the ambitious vision of capturing a larger share of the EV market.
For existing Ola Electric shareholders, the advice from industry experts is to hold the scrip for the medium to long term, maintaining a stop loss at ₹75. The strong institutional buying activity and the limited chances of a retracement in the share price have led experts to believe that the upside potential for the stock remains intact.
As for fresh investors, the experts suggest a cautious approach. They recommend that new investors start accumulating Ola Electric shares from the current levels and continue to add after every significant dip in the stock price. However, they also advise maintaining a stop loss at ₹75 to mitigate the risks associated with the company’s financial performance and the competitive landscape.
A roller coaster debut, or a promising future?
The debut of Ola Electric Mobility’s shares on the Indian stock exchanges has been a roller coaster ride, with strong institutional interest and mixed sentiments among investors.
As Ola Electric navigates the competitive EV landscape and addresses its financial challenges, the company’s future outlook remains a topic of intense debate. Investors, both existing and new, will closely follow the company’s progress, weighing the risks and the potential rewards as they chart their investment strategies.
