Ola Electric’s $734 million IPO: 2024’s largest in India—Should you invest?

Ola Electric is gearing up to make an entrance into the public market with what is set to be the largest Initial Public Offering (IPO) of 2024. 

Scheduled to debut on the Indian stock exchanges this Thursday, the electric scooter manufacturer is creating waves with a valuation of $734 million. 

The IPO will see Ola Electric offering shares at INR 72 to 76 ($0.86 to $0.91), with a special discount of up to INR 7 for eligible employees.

As a Softbank-backed company, Ola Electric’s move has already attracted considerable attention from global financial heavyweights such as Fidelity and Nomura. This underscores the increasing international interest in India’s rapidly growing electric vehicle (EV) sector.

India’s IPO landscape 

Ola Electric’s IPO is not just a landmark event for the company but also a significant marker in India’s robust capital markets. 

The country’s IPO landscape has been exceptionally vibrant in 2024, reflecting a broader trend of investor confidence and market dynamism. 

This year alone, India has witnessed over 150 companies go public, raising approximately $5 billion. This is a stark contrast to the $2.5 billion raised during the same period last year.

Recent high-profile IPOs include Bharti Hexacom and Aadhar Housing Finance, which raised $511 million and $358 million, respectively. 

Go Digit General Insurance also made headlines by securing $312 million in its IPO in May. 

This string of successful public offerings highlights India’s burgeoning market potential, especially within the green technology sector.

Ola Electric’s market position 

Despite a reduction in its valuation from $5.4 billion during its last funding round led by Singapore-based Temasek in September, Ola Electric’s IPO still positions it as a major player in the Indian EV space. 

The company is set to be valued at approximately $4 billion, a testament to its pivotal role in the country’s clean energy revolution.

Ola Electric’s Chairman, Bhavish Aggarwal, has emphasized the company’s mission to transform India into a global EV hub, aligning with Prime Minister Narendra Modi’s vision for sustainable energy. 

Although Ola recently adjusted its sales forecasts, it remains a dominant force in India’s e-scooter market, commanding a significant 46% market share.

However, Ola Electric’s title of the largest IPO of the year may be short-lived. 

Hyundai Motor India is poised to enter the Indian stock market with a potentially massive $3 billion IPO. 

This forthcoming listing on the Mumbai Stock Exchange is anticipated to elevate both Hyundai’s profile and the overall stature of the Indian automotive sector.

As the IPO landscape in India continues to evolve, Ola Electric’s public debut will be a critical test of investor sentiment towards the country’s green technology sector. 

The success of this offering could pave the way for more investments in sustainable transportation and set a benchmark for future IPOs in the industry.

Investors should keep a close watch on the market’s response to Ola Electric’s IPO and its implications for the broader EV sector. 

With Hyundai’s impending entry into the market, the spotlight on Indian IPOs will only intensify, signaling an exciting year ahead for both investors and the automotive industry.

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