Ola Electric Share : Ola may be on the radar of ESG funds as its future factory will have all-women workers and a total of 20,000 employees.
Shares of India's leading e-scooter maker Ola Electric Mobility jumped another 10% to close at Rs 133 on Friday. The valuation of the SoftBank-backed firm now stands at Rs 58,558 crore or $7 billion. The latest valuation is 75% higher than the $4 billion (Rs 33,522 crore) the company had sought in its initial public offering of Rs 6,146 crore.
This IPO was the biggest IPO in the Indian market in two years. The share price in the IPO was fixed at Rs 76, which received just 4 times the applications. The latest surge in Ola's stock came on the launch of a new motorcycle and talks of reducing costs by using its own battery.
The introduction of e-motorcycles is likely to intensify competition in the world's second-largest two-wheeler market, where Ola Electric will have to compete with big competitors like Bajaj Auto, TVS Motor and Hero MotoCorp. Two-wheelers dominate Indian roads and 18 million vehicles were sold last year.
When raising funds before the IPO, Ola was valued at $5.4 billion in September 2023. But Ola Electric had to reduce the valuation target for its IPO to $4 billion as global tech companies were down and it had to attract partners in the share offering. Some investors sold shares at a loss in the IPO.
HSBC said in a note that the e-scooter maker plans to make important batteries for everyone. It is trying to make most of the EV parts in the country itself. This will attract investors who want to bet on the electrification theme in India. HSBC has given a buy rating to this stock and has given a target of Rs 140 (Ola Electric Stock Target Price). Regulatory support and the company's ability to reduce costs have been cited for this.
On Wednesday, Ola Electric announced a bigger loss in the first quarter, which was hit by a cut in subsidies. On Thursday, the company introduced a new series of e-motorcycles and thus expanded into a new market. It plans to equip its vehicles with its own batteries by this time next year.
EV adoption is increasing slowly in India due to concerns about the range of vehicles, insufficient charging infrastructure and low resale value of old vehicles. Morgan Stanley said that Ola's electric motorcycle line will meet the needs of the common people and the premium segment, whose price will be around traditional motorcycles, which can intensify competition.
Ola may be on the radar of ESG funds as its future factory will be all-women and the total employees will be 20,000.
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