The strong closing that translated to a market capitalisation of a little over INR 40,200 crore (nearly USD 4.8 billion) for the top Indian electric two-wheeler company left market players surprised. During the bidding process that was open from Aug 2 to 6, the stocks were offered at INR 72-76 per share.
According to dealers and market analysts, the non-institutional part in Ola Electric’s IPO (the portion reversed for high networth investors) didn’t see high subscription as was expected during the bidding period. Compared to smaller IPOs that get subscriptions from HNIs in double-digits, the Ola Electric issue was subscribed 2.4 times. For HNIs who look for listing gains, this low subscription figure increased the cost of application in the offer.
As the stock was listed on Friday morning, lots of HNIs rushed in to sell which initially depressed the price. After the initial bout of selling, long-term investors stepped in that in turn lifted the stock price to hit the upper circuit level and close at the same price, market players said.
“The performance of Ola aftert the listing has caught people by surprise. A 20% gain on listing has beaten all expectations and puts the stock on radar for the immediate future,” Arun Kejriwal, director, KRIS, an investment advisory services firm.
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