The company's shares made a tepid stock markets debut, to rise 20 percent later. Such gains for those chasing listing pops may not be worth it and indicate investors' risk-taking ability is low as markets have been under pressure in the last few days
Bhavish Aggarwal, CEO of Ola Cabs and founder of Ola Electric and his wife, Rajalakshmi Aggarwal ring the bell during Ola Electric's listing ceremony at the National Stock Exchange (NSE) in Mumbai, India, August 9, 2024.
Image: Francis Mascarenhas / Reuters
The first challenge a company faces right after its initial public offering (IPO) closes for subscription is its shares listing on the stock exchanges, especially if it comes at a time when market conditions are volatile or under pressure. Despite the hype and publicity, Ola Electric Mobility made a tepid debut on the stock exchanges on Friday, only to later hit 20 percent higher during the day.
However, are such gains on a stock mired with financial risks, negative cash flow and no visibility of profitability, worth for those investors chasing lip-smacking listing pops? What does it indicate about the markets sentiment now?