The shares listed at Rs 76 apiece, in line with the IPO price. The listing was mainly in line with expectations as the GMP was discounted in the unlisted market.
Investors consider GMP as one of the factors for applying to an IPO, which gives an idea about the demand for the issue and also the listing premium.
Analysts say the GMP may not always be a reliable indicator for the IPO performance. It may provide some insights into the market sentiment, but cannot guarantee the actual listing performance.
Various factors such as the fundamentals of the company, market conditions and investor sentiment are correlated with the IPO performance.”In the case of Ola Electric, despite receiving decent response from the market during the subscription period, the GMP turned negative due to a shift in market sentiment. This further supports the fact that while GMP can offer a snapshot of investors’ expectations, it should not be considered as the sole factor while making investment decisions,” said Parth Shah, Research Analyst, StoxBox.Not just in the case of Ola Electric, there have been IPOs in the past which had rich GMPs, but prices dampened post listing and vice versa.”Eventually pricing has to reflect fair value and there could be periods of distortion along the way investor preference, as in this particular case, is also influenced by businesses which are in the emerging high growth sectors and have propositions which are unique and potentially disruptive,” said Arindam Ghosh, Co- Founder, Alphaniti.
The surge in share price of Ola Electric is also due to its leadership in the electric two-wheeler market, holding a 35% share.
“The IPO from Ola marks a significant milestone in the green mobility sector. It not only underscores the company’s growth and market leadership but also highlights the broader potential of the EV sector. Consequently, investors are bullish on the future of green mobility with Ola Electric,” said Master Capital Services.
“Ola’s market leadership positions it favorably in a rapidly growing market. Further, strategic initiatives like investments in research and development, as well as plans for a Gigafactory to enhance production capabilities and positive overall market outlook supported by favorable regulatory conditions and increasing consumer demand for sustainable transportation options bode well,” said Atul Parakh, CEO of Bigul.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
