The shares of Ola Electric Mobility, a leading electric two-wheeler manufacturer headquartered in Bengaluru, experienced a significant drop, falling by 5.33% to ₹104.10 on the BSE as of Monday, September 9.
This decline coincides with the conclusion of the one-month lock-in period for the company's shares, allowing approximately 18.18 crore shares, representing 4% of Ola Electric’s outstanding shares, to enter the trading market.
Impact of lock-in expiry on stock performance
With the end of the lock-in period, a substantial portion of Ola Electric's shares became available for trading. This increased supply in the market has led to a natural dip in the stock price. It's important for those who invest in stocks to be aware of such lock-in expirations, as they can have a notable impact on a stock’s short-term performance.
Ola Electric's stock market journey
Ola Electric Mobility’s shares were listed on the National Stock Exchange (NSE) on August 9 at ₹76 per share, the same as the issue price, making for a flat debut. However, the stock quickly gained momentum, reaching a record high of ₹157.53 by August 20.
Despite this initial surge, the end of the lock-in period has introduced volatility into the stock's performance, a factor that those who invest in stocks should consider when assessing their portfolios.
Insights from Ola Electric's IPO
Ola Electric’s initial public offering (IPO), which raised ₹6,145 crore, was met with strong interest, being oversubscribed by 4.27 times. The IPO was priced between ₹72 and ₹76 per share and included a fresh issue of up to ₹5,500 crore and an offer-for-sale (OFS) of up to 8.49 crore equity shares. For those looking to invest in stocks, understanding the dynamics of IPOs and how they affect stock prices is crucial.
Utilisation of IPO proceeds
According to the company's prospectus, Ola Electric planned to use ₹1,227.6 crore of the ₹5,500 crore raised for expanding its cell manufacturing plant's capacity from 5 GWh to 6.4 GWh. Additionally, ₹1,600 crore was allocated for research and development, ₹800 crore for debt repayment, and ₹350 crore for organic growth initiatives.
Investors who invest in stocks should note how companies plan to use IPO funds, as this can influence long-term growth and profitability.
Financial performance and future prospects
Following its stock market debut, Ola Electric reported revenue from operations of ₹1,644 crore for the April-June quarter of FY25, a notable increase from ₹1,243 crore in the same quarter of the previous fiscal year. The company’s CEO, Bhavish Aggarwal, highlighted this period as a strong quarter in terms of growth and profitability.
Additionally, the company is set to introduce its 'Bharat 4680' cell and battery pack in its vehicles starting in the first quarter of FY26. For investors who invest in stocks, understanding a company’s financial health and future product launches is key to making informed investment decisions.
Ready to invest in stocks? Make informed decisions with Ola Electric in mind
As Ola Electric navigates the post-IPO market environment, those who invest in stocks should closely monitor the company's stock performance, especially in light of the recent lock-in period expiry. Understanding these market dynamics is essential for making strategic investment decisions.
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