Stock exchanges facilitate trading in listed shares and securities, including bonds and commodities. They enable companies to list their stock publicly, generating extra capital for their operations. Additionally, stock exchanges provide investors with a platform to trade, facilitating wealth creation. In India, the prominent stock exchanges are the NSE and BSE.
What is NSE?
Founded in 1992, the National Stock Exchange (NSE) is India’s leading stock exchange, boasting the highest market capitalization among its peers. This financial powerhouse revolutionized the trading landscape by pioneering electronic stock trading, a groundbreaking advancement that streamlined and modernized the process of buying and selling stocks. With its headquarters strategically located in Mumbai, the NSE operates at the heart of India’s economic activity.
Its benchmark index, the Nifty 50, is central to the NSE’s operations. This index is a meticulously curated collection of the fifty most influential and impactful stocks drawn from diverse sectors within the share market. The Nifty 50 serves as a barometer of the overall health of India’s stock market, offering valuable insights into market trends and performance.
Ola Electric’s IPO
The country’s largest electric two-wheeler (e2W) player, Ola Electric, is gearing up for the biggest initial public offering (IPO) of the year, aiming to raise Rs 6,146 crore ($734 million). Around 150 companies in India have already gone public this year, raising a total of $5 billion—double the amount raised during this period last year.
The Softbank-backed company has set a price band of Rs 72-76 per share for its maiden share sale, expecting to test the appetite for new-age loss-making companies. At the top-end of the price band, Ola will be valued at Rs 33,522 crore ($4 billion) on a post-diluted basis. The IPO will open on August 2.
Founder and CEO Bhavish Aggarwal, charting a path to profitability for Ola Electric, emphasized that volume growth and vertical integration would be the main pillars for improving the company’s margins. Through the IPO, the Bengaluru-based firm plans to issue fresh shares worth Rs 5,500 crore, which will be used to repay debt, expand its gigafactory, and fund research and development.
The Offer for Sale (OFS) portion of the issue is Rs 646 crore, with Aggarwal’s share being Rs 288 crore. About nine other investors are selling stakes, including Tiger Global (Rs 48 crore) and Softbank (Rs 181 crore). Alpine Opportunity and Tekne Private are offloading small quantities at a loss, as their acquisition cost is over Rs 111 per share.
Following the IPO, the promoter shareholding in the company will decline from nearly 45 percent to 36.78 percent. Investment bankers, basing the IPO pricing on investor feedback, expect strong responses from both domestic and foreign mutual funds. According to a Reuters report citing sources, the IPO is set to draw bids from Fidelity, Nomura, Norges Bank, and several Indian mutual funds.
Aggarwal remarked, “The India EV story is still in its early days. Three years ago, when we launched our products, that is when I believe the EV story began. We see the EV market only expanding. You also see the incumbents, who three years back said there is no EV story, joining the segment.”
Addressing concerns about the drop in sales and the global EV segment slowdown, Aggarwal noted that the industry would go through cycles, with ups and downs due to factors like subsidy changes and seasonal variations.
Ola Electric’s gross margins have improved from 5.4 percent in FY22 to 7.63 percent in FY23 and 16.47 percent in FY24. Its volumes have grown from 156,000 units in FY23 to 330,000 units in FY24.
Currently, Ola Electric sources cells from third-party suppliers. It has started trial runs at the gigafactory in Tamil Nadu, where phase 1 of the project was completed in May (1.4 GWh capacity). The company has developed a cell technology around the 4680 form factor, receiving BIS certification in May, which will be used in existing and future products. The gigafactory will have a capacity of 20 GWh (in four phases). Ola Electric is also in line for the Cell PLI (production-linked incentive) scheme. It has already received certification for the S1 Pro product under the PLI scheme and is currently filing for the first claims to the Centre.
The company’s 2,000-acre EV hub in Krishnagiri and Dharmapuri districts of Tamil Nadu, housing the ‘futurefactory’ and the gigafactory, along with co-located suppliers, will help achieve greater efficiency.
Aggarwal announced that the company would start delivering motorcycles by early next year. It had showcased four motorcycle models – Adventure, Cruiser, Roadster, and Diamondhead – last August. On August 15, the company plans to unveil more two-wheeler models.
As India aims to capture a larger share of two-wheeler exports, Aggarwal is betting big on Ola Electric for a smooth drive into the future.
