Ola Electric stock jumps 20% on second day of trading, hits upper circuit

The stock was trading 20% higher at ₹109.4 apiece on the National Stock Exchange (NSE).

The company's market valuation stands at ₹48,272.1 crore.

The ₹6,145-crore initial share sale of Ola Electric received 4.27 times the subscription during the August 2 to August 6 bidding window.

The public offer had a price band of ₹72-76 a share. The IPI, the first by an electric vehicle maker, had a fresh issuance of up to ₹5,500 crore and an Offer-for-Sale (OFS) of up to 8,49,41,997 equity shares.

According to its prospectus, Ola Electric Mobility Ltd (OEML) plans to utilise ₹1,227.6 crore out of the proceeds of its ₹5,500-crore public issue on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh.

The company is also looking to use ₹1,600 crore from the fresh fund on research and product development. Another ₹800 crore will be deployed to repay debts and ₹350 crore for organic growth initiatives.

In its Red Herring Prospectus (RHP), OEML said Phase 1 (a) and Phase 1 (b) of the establishment and expansion of the Ola Gigafactory at Krishnagiri district in Tamil Nadu will be funded from internal accruals and long-term borrowings availed by its arm, Ola Cell Technologies Pvt Ltd (OCT).

The company said a portion of the proceeds will be used for capital expenditures incurred by OCT to expand the capacity of the cell manufacturing plant from 5 GWh to 6.4 GWh.

Ola Electric manufactures EVs and certain core EV components, such as battery packs, motors, and vehicle frames, at the Ola Futurefactory.