The shares of Bhavish Aggarwal led Ola Electric Mobility Limited on Tuesday (November 5) dropped over 5 per cent in the early trading hours following the expiration of a critical anchor lock-in period.
By 12:33 PM IST, the shares of the two wheeler EV maker were trading at Rs 74.99 on BSE, down by 5.60 on BSE. Similarly on NSE, the shares were trading at Rs 74.92 apiece, falling by 7.32 per cent at the same time.
Share Perfromance NSE |
The Ola Electric, which recently came to the limelight due to an online feud between its CEO Bhavish Aggarwal and stand-up comedian Kunal Kamra, has sparked many challenges with Kamra taking a jab at the electric vehicle company and its services. Furthermore, in some or the other way, this has also reflected on the shares of the company as well.
The recent decline in the company's stock comes as Ola Electric’s three-month lock-in period for anchor investors ends, releasing 18.18 crore shares, or around 4 per cent of the company's outstanding shares, into the open market.
What Is the Anchor Lock-in Period, and Why Does It Matter?
Anchor investors, as one of the much heard term in the IPOs are institutional investors who invest in a company before a company's IPO opens to the public.
However, their shares are subject to lock-in periods to help stabilise the stock price and prevent massive sell-offs immediately after the IPO.
Image used for representational purposes only |
For Ola Electric, this meant that 50 per cent of anchor-allocated shares were locked for 30 days, ending on September 9, while the remaining 50 per cent reached their 90-day mark on November 5.
The end of this period means anchor investors can now sell their shares if they choose to. However, it does not imply that all 18.18 crore shares will be offloaded immediately. The shares are now simply available for trading, depending on each investor’s strategy.
Ola Electric IPO and Stock Performance So Far
The EV makers piblic issue was launched on August 2, this year and the company raised a substantial Rs 6,145.56 crore from the market, with anchor investors contributing Rs 2,763 crore by buying shares at the upper price band of Rs 76 per share.
The stock debuted flat on August 9, listed at par with its issue price on the NSE and slightly lower on the BSE at RS 75.99.
Ola shares performance - 3M - BSE |
Despite the initial flat performance, Ola Electric shares saw some highs in the weeks following their listing, hitting a peak of Rs 157.53 on August 20.
However, a gradual decline ensued, with the share reaching a recent low of Rs 74.82 on October 29, near today’s levels.
