Ola Electric Mobility Ltd. has seen its shares surge nearly 90% within two weeks, taking the company’s market capitalization to more than $7 billion. Bloomberg reported that this rapid growth vindicated founder Bhavish Aggarwal’s decision to take the company public, despite initial doubts about its valuation.
The company’s initial public offering (IPO), the largest in India in the last two years, attracted wide interest from investors. The surge in the share price has allowed Aggarwal to reach his target valuation earlier than anticipated, driven by strong demand in India’s thriving IPO market. Ola Electric, India’s largest e-scooter maker, had gone ahead with an IPO at a low valuation after facing investor concerns over its profitability.
“There is a serious belief among investors in India’s electric vehicle story,” Aishwarya Dadhich, chief investment officer at Fident Asset Management Pvt Ltd, told Bloomberg. The EV sector is one of the biggest beneficiaries.”
Ola’s impressive stock market debut follows the trend of strong performance by other Indian tech companies. Zomato Ltd., a food delivery service and India’s first unicorn to go public, as well as PB Fintech Ltd., an insurance marketplace operator, have both seen their shares more than double this year, becoming the top performers in the consumer technology sector in emerging markets. Have become doers.
Mohit Nigam, fund manager, Hem, said, “Many of these companies were loss-making at the time of their inception, but they were able to retain investor interest only after prioritizing profitability, which will be important for Ola as well. “
Despite the positive momentum, Ola, backed by SoftBank Group Corp and Tiger Global Management LLC, reported losses widening to 15.9 billion rupees ($189 million) for the fiscal year ending March 2024. On Wednesday morning, Ola’s stock witnessed fluctuations.
