Anika Begay
Ola Electric, India’s largest maker of electric two-wheelers, jumped 20% in its stock market listing on Friday, the biggest listing among Indian companies in two years.
Shares of the Bengaluru-based company, which counts SoftBank and Temasek among its backers, jumped to 91.18 rupees ($1.1) from its upper IPO price range of 76 Indian rupees. The company filed for an IPO at a valuation 26% below the $5.4 billion it raised in a funding round in October 2023 and significantly below the $6.5 billion to $8 billion range it had initially targeted for an IPO.
At 87 rupees, Ola Electric has a market capitalization of nearly $4.6 billion.
Ola Electric has emerged as the dominant player in the Indian electric two-wheeler market, with a 46% market share in FY2025, despite a recent dip to 39% in July. Ola launched its first electric scooter in December 2021 and sold more than 330,000 units in the fiscal year ended March.
But the company is not profitable. It generated revenues of Rs 50 billion ($626.3 million) and reported an EBITDA loss of Rs 13 billion ($162.8 million) and a net loss of Rs 16 billion ($200.5 million) in the same period.
Ola Electric’s strategic initiatives include developing its own battery cell technology and manufacturing capabilities, with plans to expand capacity to 20 GWh by Q2 2026. This vertical integration should provide greater control over quality, supply and costs.
India’s electric vehicle market is poised for substantial growth, with Macquarie forecasting a gradual increase in the share of electric two-wheelers. Estimates suggest market penetration rates of 7%, 10%, 13% and 16% for fiscal years 2025, 2026, 2027 and 2028, respectively. This contrasts with a more optimistic forecast of 41-56% by fiscal year 2028 in Ola Electric’s prospectus, highlighting the ongoing debate over the pace of EV adoption in India.
Recent reductions in government subsidies for electric two-wheelers have impacted the growth trajectory of the sector. Despite this, the Indian electric vehicle market has witnessed a consolidation trend, with the Herfindahl-Hirschman Index (HHI), a measure of market concentration, rising from 1,200-1,330 in fiscal 2022-23 to 2,810 in the June quarter, surpassing the figure of 2,160 for traditional internal combustion engine two-wheelers.
