Ola Electric, India’s leading electric two-wheeler manufacturer, experienced a remarkable 20% surge in its stock price on its recent public debut. This makes it the biggest listing among Indian companies in the last two years. The company, which boasts prominent investors such as SoftBank and Temasek, saw its shares rise to 91.18 rupees ($1.1), surpassing the upper IPO price band of 76 Indian rupees.
It’s worth noting that Ola Electric’s IPO valuation was 26% lower than its funding round in October 2023, where it achieved a valuation of $5.4 billion. Furthermore, it fell significantly short of the initial target range of $6.5 billion to $8 billion for the IPO. However, even with a share price of 87 rupees, Ola Electric now commands an impressive market capitalization of nearly $4.6 billion.
Despite recent fluctuations in its market share, Ola Electric has emerged as the dominant player in India’s electric two-wheeler market. In the fiscal year 2025, it maintained a market share of 46%, although it dipped to 39% in July. The company’s success can be attributed to the launch of its first electric scooter in December 2021, which sold over 330,000 units in the financial year ending in March.
However, it is important to note that Ola Electric has yet to achieve profitability. In the same period, it generated revenues of 50 billion rupees ($626.3 million) but reported an EBITDA loss of 13 billion rupees ($162.8 million) and a net loss of 16 billion rupees ($200.5 million). Despite these financial challenges, Ola Electric has implemented strategic initiatives to enhance its position in the market. This includes developing its own battery cell technology and manufacturing capabilities, with plans to expand capacity to 20GWh by the second quarter of 2026. This vertical integration is expected to provide the company with greater control over quality, supply, and costs.
The electric vehicle market in India is set for significant growth in the coming years. Macquarie, a renowned financial services company, projects a gradual increase in the market share of electric two-wheelers. Estimates suggest that market penetration rates will reach 7%, 10%, 13%, and 16% for fiscal years 2025, 2026, 2027, and 2028, respectively. However, Ola Electric’s own prospectus offers a more optimistic outlook, forecasting a market penetration rate of 41-56% by fiscal year 2028. This discrepancy highlights the ongoing debate about the pace of electric vehicle adoption in India.
While the Indian government’s recent reduction in subsidies for electric two-wheelers has impacted the sector’s growth trajectory, the electric vehicle market has witnessed a consolidation trend. The Herfindahl-Hirschman Index (HHI), which measures market concentration, increased from 1,200-1,330 in fiscal years 2022-2023 to 2,810 in the June quarter. This figure surpasses the HHI of 2,160 for traditional internal combustion engine two-wheelers, indicating the growing prominence of electric vehicles in the market.
Overall, Ola Electric’s successful public debut and market dominance demonstrate the immense potential of the Indian electric two-wheeler market. With strategic initiatives in place and the projected growth of the electric vehicle industry, Ola Electric is well-positioned to capitalize on the evolving landscape and cement its position as a key player in the sector.