Ola IPO waits to cross the line ; FirstCry's anchor book sets off

75% of Ola's maiden issue is reserved for qualified institutional buyer

Ola Electric Mobility’s initial public offering (IPO) of Rs 6,146-crore — the largest in two years — closes on Tuesday. Amid a selloff in the global market, subscription for the maiden share sale by the country’s largest electric two-wheeler (E2W) maker is lukewarm.

At 10.30 am, the qualified institutional buyer (QIB) portion of the issue was subscribed to just 40 per cent. As Ola is a loss-making company, 75 per cent of its issue is reserved for QIBs as against 50 per cent for IPOs of profit-making companies. It is mandatory that the QIB portion of the IPO garners 100 per cent subscription if the issue has to succeed. Investment bankers are confident that the portion will be oversubscribed. They have said most of the bids will come post 1pm. The other portions reserved for high-net-worth individuals (HNI), retail and employees are already fully subscribed. The HNI portion was subscribed 1.3 times; retail 3.1 times and employee quota 10 times.

Ola has already allotted 364 million shares to anchor investors to mop up Rs 2,763 crore. The allotment was made at Rs 76 apiece—the top-end of its price band.

Softbank-backed Ola has set the price band of Rs 72-76 per share for its maiden share sale. At the top-end of the price band, Ola will be valued at Rs 33,522 crore ($4 billion) on a post-diluted basis.

FirstCry's anchor book

Brainbees Solutions’ (FirstCry) Rs 4,193-crore is off the block. The company, which too is backed by Softbank, on Monday allotted 40.6 million shares worth Rs 1,886 crore to 71 funds at Rs 465 per share, the top end of the price band.

Some investors that applied in the anchor category include SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Government of Singapore and Abu Dhabi Investment Authority.

The company, which sells baby products including clothes, has set the price band of Rs 440-465 per share. At the top-end, the multi-channel retailer will be valued at Rs 24,142 crore. The IPO comprises fresh fundraising worth Rs 1,666 crore and secondary share sale worth Rs 2,528 crore. The selling shareholders are SoftBank, Mahindra & Mahindra, Premji Invest and TPG. FirstCry will use the IPO proceeds to set up new stores, digital expansion and expansion in Saudi Arabia. In FY24, the company had revenues from operations of Rs 6,480 crore and net loss of Rs 321 crore.