Ola Electric, an Indian startup specializing in electric vehicles, saw its stock increase by 20% on its first trading day, boosting its valuation to approximately $4.8 billion.
The company, which had its shares debut at 76 rupees (about 91 cents) each, successfully raised over $730 million through its initial public offering (IPO) in Mumbai. This marks the largest IPO in India for the year, as reported by Reuters.
The stock price climbed to 91.20 rupees by the afternoon of the debut day. This jump in stock price reflects the strong investor confidence in Ola Electric's potential to become a significant player in the burgeoning Indian electric vehicle sector, especially at a time when the Indian government is intensifying its support for the industry.
Ola Electric, which started shipping its electric scooters just two and a half years ago, is now gearing up to launch its first electric motorcycle in late 2025. The company aims to capitalize on the growing trend towards electric two-wheelers in India, with projections suggesting that electric scooters could make up 60% to 70% of all new scooter sales by 2030, according to McKinsey & Co.
Founded by notable entrepreneur Bhavish Aggarwal, Ola Electric is taking a comprehensive approach similar to Tesla, handling everything from design and manufacturing to battery production. However, the company currently has no plans to venture into the car market.
Backed by prominent investors like SoftBank and Temasek from Singapore, Ola Electric intends to use the funds from the IPO to reduce debt, enhance research and development, and expand its gigafactory for battery production. Despite a 90% increase in revenue over the past year, the company's losses have also grown, and it has yet to achieve profitability.
Aggarwal, who also co-founded the ride-hailing service Ola Cabs, remains a pivotal figure in India's tech and transportation sectors.