Bhavish Aggarwal, CEO of Ola Cabs, and founder of Ola Electric,
Credit: Reuters Photo
Bengaluru: On Thursday, Bengaluru-based Ola Electric Mobility Ltd had much to celebrate when its initial public offering (IPO) attracted $2 billion investment from major institutional investors for a $330 million quota set aside for the segment.
However, on Friday when its public offering went live it managed to draw just 35 per cent subscription, with lukewarm interest seen from qualified institutional investors (QIBs) and non-institutional investors (NIIs).
While the institutional investors were offered the shares at Rs 76 a piece, the public offer is in the price range of Rs 72-76 an equity share. Being oversubscribed on Thursday, the SotBank-backed company finalised the allocation of 363,556,135 shares to the big institutional investors. Among the recipients of the allocation were Japan’s investment banker Nomura, Norway’s Norges Bank and the mutual fund arms of State Bank of India and HDFC.
The country’s biggest IPO this year yet, the Rs 6,145.56-crore issue, is being closely followed in a bustling stock market. The company, which counts the US hedge fund Tiger Global Management and the venture capital Matrix Partners India among its existing investors, opened its offer to QIBs, NIIs and retail individual investors and employees on Friday. According to the data sourced from BSE, of the 46.52 crore shares on offer, bids came in for only 16.35 crore (35 per cent), until 4pm on Friday.
Interestingly, the retail investor segment was oversubscribed by 1.57 time on the very first day of the offer that ends on Tuesday, August 6. The enthusiasm shown by employees was even more overwhelming at 4.88 times the shares on offer for them. However, subscriptions from NIIs were merely 20 per cent and QIBs’ participation was even more insignificant until 4pm on Friday.
IPO to fetch Hyundai $100 million
Among Ola’s investors who will be offering their stake for sale, as part of the offer for sale (OFS) element of the issue, is Hyundai Motors. It is expected to make $100 million from selling its 2.95% stake in Ola, according to in the red herring prospectus filed by the company with the Bombay Stock Exchange.
The OFS will see Ola’s founder Bhavish Aggarwal offload 37.9 million shares, while other institutional investors will also shed 47.89 million shares.
(With Reuters inputs)