Indian EV startup OLA Electric pops 20% on IPO debut, now valued at $4.8 billion

OLA Electric went public on Friday, with shares surging 20% during their debut, valuing the SoftBank-backed Indian electric vehicle startup at around $4.8 billion.

The company set its IPO price at 76 rupees (91 cents) per share, raising over $730 million through its initial public offering in Mumbai. This marks one of India’s largest IPOs this year, according to a report from CNBC. OLA Electric plans to use the funds to reduce debt, invest in research and development, and expand its gigafactory battery plant.

Although the company reported a 90% revenue increase for the fiscal year ending March 31, it also saw its losses grow and has yet to achieve profitability.

“Despite receiving demand well below street expectation, OLA listed well above street expectations, which can be attributed to market mood,” Prashanth Tapse, senior vice president of research at Mehta Equities, told Reuters.

Earlier this month, OLA Electric drew our attention when it attracted $2 billion in bids from institutional investors during its IPO. This move places the company at the forefront of India’s rapidly expanding electric vehicle market.

Founded in 2017 by entrepreneur Bhavish Aggarwal, OLA Electric—a subsidiary of OLA—focuses on producing electric scooters. Despite only launching its first product two-and-a-half years ago, the company has quickly gained traction. Aggarwal is also known as the co-founder of OLA Cabs, a leading ride-hailing service in India.

OLA Electric Founder Bhavish Aggarwal

OLA Electric has carved out a niche by managing everything from design to manufacturing and batteries. While the company had initially considered entering the electric car market, it recently decided to put those plans on hold.

The company’s electric scooters, however, have dominated the market, capturing nearly 46% of the e-scooter sector in just three years—a sharp contrast to electric car sales in India, which reached around 45,000 units by mid-2023. In the same period, nearly half a million e-scooters were sold.

In India, two-wheelers are the most common mode of transportation. Projections from McKinsey & Co. suggest that by 2030, electric two-wheelers could make up 60% to 70% of all new scooter sales in the country.

OLA Electric’s focus on e-scooters highlights its ability to meet immediate market demands and navigate infrastructural challenges. This is evident in its ongoing product development, strategic sales approaches, and expansion plans in Tamil Nadu.

As part of its future growth strategy, OLA Electric is gearing up to launch its first electric motorbike in the second half of 2025. The company is supported by prominent investors, including SoftBank and Singapore’s investment fund Temasek.