Ola Electric's share price surged by nearly 20 per cent on August 9, hitting the upper circuit after a relatively flat start on the bourses. The Bangalore-based EV manufacturer was one of the most anticipated new-age IPO (Initial Public Offering) of this year.
The public offering was open for subscription from August 2 and closed on August 6, with the allotment finalizing on August 7.
As of 2:15 pm, the shares of the company had hit the upper circuit limit and were trading at Rs 92.20, up by 20 per cent on the National Stock Exchange.
"Despite receiving demand well below street expectation, OLA listed well above street expectations can be attributed to market mood. Post listing the short term view remain same due to weak financials and risk of negative cash flows in future and allotted investors should understand the risk before holding which could adversely impact its consolidated financial condition post listing," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
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New-age IPOs Hitting The D-Street This Year
Multiple new-age IPOs are set to hit the markets this year, with Unicommerce and FirstCry expected to make their debut on D-Street by next week. Food-delivering platform, Swiggy is also planning an IPO by the end of the year.
The first wave of new-age IPOs, which included companies like Paytm, Nykaa and Zomato, initially launched with a subdued performance but eventually gained traction.
Despite this, skepticism remains as investors now closely monitor profit lines. Last year, Zomato's profitability signaled a potential shift in sentiment. mamaearth's IPO performance followed suit, and is comfortably trading above its issue price.
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As for Ola's IPO, analysts recommend that only risk-taking investors should continue to hold the shares of the EV maker, with a minimum holding period of 2-3 years.
"We recommend risk taking investors to accumulate on every dip to be part of 2-3 years of journey. The long term story is intact but we may see a lot of ups and downs in the short term," Tapse added.
