Ola Electric Mobility's IPO received a muted response from investors on Day 1, with the issue being subscribed 35%. Retail portion was fully subscribed.
Photograph: Francis Mascarenhas/Reuters
New Delhi, Aug 2 (PTI) The Rs 6,145 crore initial share sale of electric two-wheeler company Ola Electric Mobility received a muted response from investors, with the issue being subscribed 35 per cent on the first day of the bidding process on Friday.
The company's initial public offering (IPO) was mostly subscribed by retail investors, with the portion reserved for them being subscribed 1.57 times.
The issue, open from subscription from August 2 to August 6, received bids for 16.31 crore shares against 46.51 crore shares on offer. This translates into a subscription of 35 per cent, according to the data available with the National Stock Exchange (NSE) till 5 pm.
The quota set aside for non-institutional investors was subscribed to 20 per cent. However, the portion reserved for qualified institutional bidders (QIBs) did not see any significant bids.
Hyundai Motor Company will own shares worth USD 99 million of Ola Electric Mobility Ltd shares if the ongoing public issue of the electric two-wheeler company
sails through.
Its 108.8 million equity shares or 2.95 per cent stake in Ola Electric Mobility is valued at USD 99 million at the highest price band of Rs 76 per share.
Ola Electric Mobility's shares are priced at Rs 72-76 per share, with investors able to bid for a minimum of 195 equity shares per lot and multiples thereof.
The company's IPO is a combination of a fresh issue of equity shares up to Rs 5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares worth Rs 645.56 crore, at the upper end of the price band, by promoters and investors. This takes the total issue size to Rs 6,145.56 crore.
Under the OFS, Ola Electric founder Bhavish Aggarwal would offload almost 3.8 crore shares.
For Ola Electric, the IPO will provide the much-needed impetus to invest in enhancing cell manufacturing capacity and research and development on future technologies and products.
According to its prospectus, Ola Electric Mobility Ltd (OEML) plans to utilise Rs 1,227.6 crore out of the proceeds of its Rs 5,500-crore public issue on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh.
The company is also looking to use Rs 1,600 crore from the fresh fund on research and product development, another Rs 800 crore will be deployed to repay debts and Rs 350 crore for organic growth initiatives.
In its RHP, OEML said the Phase 1 (a) and Phase 1 (b) of the set up and expansion of the Ola Gigafactory at Krishnagiri district in Tamil Nadu will be funded from internal accruals and long-term borrowings availed by its arm Ola Cell Technologies Pvt Ltd (OCT).
The company said a portion of the proceeds will be used for capital expenditure to be incurred by OCT for expansion of the capacity of cell manufacturing plant from 5 GWh to 6.4 GWh.
On Thursday, the company mobilised Rs 2,763 crore from anchor investors, including SBI Mutual Fund (MF), HDFC MF, Nippon India MF, Bharti Axa Life Insurance Company, Kotak Mahindra Life Insurance Company, Nomura India Investment Fund, Goldman Sachs (Singapore) Pte Ltd and Fidelity.
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