‘Huge potential’: India Ola Electric’s stock market debut sparks hopes of EV expansion

India’s Ola Electric has made a strong stock market debut, driven by investor enthusiasm for the company’s ambitious plans to dominate the global electric two-wheeler market, but analysts warn supply-chain issues and stiff competition may present roadblocks.

The company’s US$734 million initial public offering (IPO) on Friday was fully subscribed by the second day of bidding earlier this month, reaching its target amid a sharp sell-off in global equity markets. On Monday, shares of Ola Electric Mobility Ltd surged 20 per cent to hit the upper circuit for the second consecutive day on the country’s benchmark Bombay Stock Exchange.

Its stock market debut had been “electrifying”, said Pranav Haldea, managing director of Prime Database, which specialises in major financial market data, adding that multitudes of investors fear missing out on an opportunity.

“There is a lot of dry powder waiting on the sidelines among domestic investors” prepared to invest a lot of money in IPOs in India, he said, adding that investors’ enthusiasm for tech-based firms had picked up in recent months after seeing a dip in 2021 amid worsening global conditions and a tech slowdown.

Despite investors’ optimism, analysts say Ola Electric has a long way to go before realising its ambition of becoming the world’s largest electric two-wheeler maker.

Bhavish Aggarwal, who founded India’s leading ride-sharing platform Ola, the sister company to Ola Electric, plans to sell electric two-wheelers in Europe, Southeast Asia and elsewhere by building the world’s largest electric two-wheeler factory in southern India.

“Clearly, there is huge potential for electrification of two-wheelers. When you have an IPO in India, a lot of your suppliers and consumers consider