India’s largest electric two-wheeler maker Ola Electric Mobility Ltd has raised Rs 2,763 crore from anchor investors as part of its initial public offering (IPO). The automaker allotted 36.36 lakh equity shares to over 80 domestic and foreign funds at Rs 76 apiece on Thursday. The IPO opened for subscription today and will close on Tuesday.
An anchor investor is an institutional investor, such as mutual funds, foreign portfolio investors and insurance companies, subscribing to shares before an IPO is open to the public for subscription. Anchor allotment provides cues for other potential IPO investors, helping in price discovery, boosting investor confidence and price stability.
Ola Electric has fixed the price band of its IPO in the range of Rs 72 to Rs 76 per share. At the upper end of the price band, the automaker is eyeing Rs 6,145.56 crore issue, which includes Rs 5,500 crore from the fresh issue of shares and Rs 645.56 crore from the offer for sale.
Up to 10% of the issue will be available for retail individual bidders while 75% of the offer has been reserved for qualified institutional buyers and 15% for non-institutional buyers. Investors can bid for a minimum of 197 equity shares and in multiples of 197 equity shares after that.
Currently, Aggarwal is the largest shareholder in the company with a stake of 36.9%, followed by SoftBank’s SVF II Ostrich (DE) LLC with a 22% stake. Aggarwal and promoter group Indus Trust plan to offload up to 3,79,15,211 crore shares and 41,78,996 shares, respectively. SVF II will sell 2,38,57,268 shares, according to the DRHP.
Ola Electric is the market leader in the electric two-wheeler segment with over 35% market share, competing with Bajaj Auto, TVS Motor, Ather and Hero MotoCorp. It plans to use Rs 1,226.43 crore from its net proceeds of the IPO for cell manufacturing at its upcoming Giga factory in Krishnagiri, Tamil Nadu. The company will also use Rs 1,600 crore for research and product development, and Rs 800 crore for debt repayment.