Ola Electric, India's leading electric two-wheeler manufacturer, made a stellar debut on the stock market Friday, with shares climbing 20 per cent. This marks the most successful Indian listing in the past two years.
The Bengaluru-based company, backed by prominent investors such as SoftBank and Temasek, saw its shares rise to Rs 91.20 after opening at Rs 76, the upper end of its Rs 6,100 crore IPO price range. Despite the strong performance, the company's market valuation of Rs 40,000 crores was lower than its October 2023 private funding round valuation of Rs 45,000 crores.
Ola Electric has emerged as the dominant player in India's electric two-wheeler market, holding a 46 per cent market share. Since launching its first electric scooter in December 2021, the company has sold over 3.3 lakh units in the financial year ending March 2024.
However, profitability remains a challenge. In the last financial year, Ola Electric reported a net loss of Rs 1,600 crores and an EBITDA loss of Rs 1,300 crores on annual revenue of Rs 5,000 crores.
To strengthen its position, Ola Electric is investing heavily in vertical integration, including developing its own battery cell technology and expanding its manufacturing capacity, with plans to reach 20GWh by Q2 2026.
The future of India's electric vehicle market is promising, even with recent cuts in government subsidies. Investment firm Macquarie forecasts electric two-wheeler penetration rates of 7 per cent, 10 per cent, 13 per cent, and 16 per cent for fiscal years 2025, 2026, 2027, and 2028, respectively.
Ola Electric is more optimistic, projecting a market share between 41 per cent and 56 per cent by fiscal year 2028.
The Indian EV market has experienced significant consolidation, with the Herfindahl-Hirschman Index (HHI)—a measure of market concentration—rising to 2,810 in June 2024 from 1,200-1,330 in fiscal years 2022-2023. This surpasses the 2,160 figure for traditional internal combustion engine two-wheelers.
As Ola Electric navigates its new role as a public company, its ability to sustain growth, achieve profitability, and adapt to the evolving Indian EV market will be closely watched.
