India’s Electric Revolution: Ola’s Blockbuster Market Debut

Ola Electric’s Market Debut and Stock Surge

Ola Electric, India’s largest electric two-wheeler manufacturer, saw its stock price rise by up to 20% during its market debut on Friday, making it the most significant Indian IPO in two years.

Valuation and IPO Performance

The Bengaluru-based company, supported by SoftBank and Temasek, had its shares climb to ₹91.18 (around $1.1) after opening at ₹76, the top end of its IPO range. The IPO valued the company 26% lower than its $5.4 billion valuation from October 2023, and below its earlier target of $6.5 billion to $8 billion.

Current Stock Price and Market Capitalization

The shares are currently at ₹90, valuing Ola Electric at $4.75 billion.

Market Leadership and Sales Milestones

As a dominant force in India’s electric two-wheeler market, Ola Electric holds a 46% market share. Since launching its first electric scooter in December 2021, it has sold over 330,000 units as of March 2024.

Profitability Challenges and Financial Performance

Despite this growth, the company remains unprofitable, reporting a net loss of ₹16 billion ($200.5 million) and an EBITDA loss of ₹13 billion ($162.8 million) on revenue of ₹50 billion ($626.3 million) in the last financial year.

Investment in Vertical Integration and Capacity Expansion

Ola Electric is investing in vertical integration, developing its own battery cells, and expanding its manufacturing. It plans to increase production capacity to 20GWh by mid-2026.

Growth Projections for India’s Electric Vehicle Market

India’s electric vehicle sector is expected to grow rapidly, with Macquarie projecting electric two-wheelers to gradually capture more of the market, reaching penetration rates of 7%, 10%, 13%, and 16% in the fiscal years 2025 to 2028.