The leading e-scooter manufacturer in India, Ola Electric Mobility, saw a 20% increase in valuation on Friday to Rs 58,664 crore ($6.99 billion), following the introduction of a new motorbike line. The company is betting that utilizing its own batteries would reduce costs. Ola Electric will compete against larger rivals like Bajaj Auto, TVS Motor, and Hero Motocorp in the world's second-largest two-wheeler market as a result of the debut of e-motorcycles.
India's highways are dominated by two-wheelers, with 18 million sold in the previous year. Following a $734 million initial public offering (IPO), Ola Electric issued its shares on August 9. Since then, its shares have increased by 75% above the Rs 76 debut price.
In a pre-IPO investment round in September 2023, its valuation was $5.4 billion. However, in order to draw investors to the stock offering and take advantage of the slump in global IT businesses, Ola Electric cut its value objective for its IPO to USD 4 billion.
Investors hoping to capitalize on the electrification trend in India should be drawn to the e-scooter maker's aim to construct an "all-important" battery and its attempts to manufacture the majority of its EV parts domestically, according to a report from HSBC. Citing regulatory backing and the company's capacity for cost-cutting, HSBC has a "buy" recommendation on the shares with a price objective of Rs 140.
Due to reductions in subsidies, Ola Electric revealed on Wednesday a larger first-quarter deficit. The business entered an unexplored market on Thursday by introducing a new line of e-motorcycles. By this time next year, it intends to have its own batteries installed in its cars.
India is seeing a gradual increase in the use of electric vehicles (EVs) because of issues with range, inadequate infrastructure for charging, and poor resale value.
According to Morgan Stanley, Ola Electric's motorbike range caters to both the "mass and premium" segments of the market, and the company anticipates more competition due to its price that is similar to that of traditional bikes.
