While some analysts are drawing comfort from the stripped-down valuations of Ola Electric at the IPO stage, volatility stemming from government policy shift and lack of path-to-profitability are some concerns
Bhavish Aggarwal, Co-founder and CEO of Ola Cabs, founder of Ola Electric and OlaKrutrim
A company may be in a fast growth stage but quick cash burn with mounting losses on the books is certainly not for the faint-hearted. As Ola Electric Mobility is planning to raise a massive Rs 6,146 crore through an initial public offering (IPO), the company’s weak financials, expansions at break-neck speed to grab a bigger pie in the market share of electric vehicles (EVs) two-wheeler business are still big risks for investors, especially retail.
One of the largest IPOs after Zomato and Paytm among the new age companies, Ola Electric is the first pure EV manufacturer to go public in India. The issue will definitely open up a completely new category of business in the listed space for investors, but the opportunity is laden with steep risks. The fund raising, with a combination of offer-for-sale (OFS) and fresh issue in the price band of Rs 72-76 a piece, will be open for subscription August 2-6.