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Good Morning. Electric vehicles (EVs), especially two-wheelers have found many takers in India and Ola Electric dominates much of the market. In May, it made up for 52% of the total market share. Now it has become the first EV company in India to go public. What does it aim to achieve with its IPO? Read on to know more. 

In other news, the government is planning to crack down on ‘surrogate ads’ by liquor companies. Plus, luxury housing is booming in NCR. 

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DE[CODE] THE NEWS

Will Ola Lead The EV Revolution In India?

Ola Electric dreams of building an end-to-end electric two-wheeler ecosystem in India. With its initial public offering, which opened last week, it is closer to achieving that dream. 

“...undoubtedly Ola is leading [the] EV(electric vehicle)  revolution in India and is a potential frontrunner among all,” Puneet Gupta, Director at S&P Global Mobility told The Core. “The success of this IPO could indeed propel Ola towards its ambition of becoming a one-stop shop for the EV sector,” he said. 

The electric two-wheeler maker’s IPO opened for subscription on Friday, August 2, and will close on August 6. On Friday, it received bids for 35% of the issue. The company is offering 808.6 million equity shares at a price range of Rs 72 to Rs 76 per share. The total issue size is expected to raise approximately Rs 6,145.56 crore, with a fresh issue of Rs 5,500 crore and an offer for sale of Rs 645.56 crore. 

CEO Bhavish Aggarwal is hopeful that the IPO will be an important milestone in his company’s journey and believes that it will benefit the entire EV industry. Aggarwal told MoneyControl in an interview, “ From an EV perspective, it's significant because it brings a lot of validation to the business of future technology and electric vehicles.”

Bidding for anchor investors opened for a day on August 1. According to a Reuters report, the IPO has drawn significant interest from institutional investors already, who bid over $2 billion for a $330 million quota reserved for big institutions. The company's expected valuation post-IPO ranges between $4.2 billion to $4.4 billion, which is lower than its previous valuation of $5.4 billion​ 

PODCAST

Friday Markets Track Global Cues

On Episode 355 of The Core Report, financial journalist Govindraj Ethiraj talks to Vinod Karki, equity strategist at ICICI Securities as well as Manisha Kapoor, CEO of the Advertising Standards Council of India (ASCI).

• The Take: Investors Concerned About Market Valuations

• Friday markets track global cues, and could stay subdued on Monday

• Oil prices fall to around $77 despite increased geopolitical risk as demand woes take over

• India Inc’s Q1 results analysed, what is looking strong and what is not?

• How India’s best known apps in health, travel and ecommerce are fooling you

CORE NUMBER

Rs 83 Crores

This is how much Zomato has collected in platform fees from customers until March. The food delivery platform started levying a platform fee of Rs 2 per order in August 2023. This has gradually been increased to Rs 6 in some key markets. According to their annual report, platform fee was one of the three factors that helped drive its Adjusted Revenue which grew 27% year-on-year to Rs 7,792 crore last fiscal year.

NASSCOM CONVERSATIONS

The Future of AI in India with Debjani Ghosh

With the current hype around AI along with companies scrambling to integrate it into their own processes, what are the real benefits of artificial intelligence when it comes to ROI? What are the opportunities it presents to a country like India? What problems in the AI value chain are primed for businesses to create something cutting-edge? President of Nasscom, Debjani Ghosh and Govindraj Ethiraj explore these burning questions and more in this episode.

FROM THE PERIPHERY

—🚢 The government is likely to start work on the international transshipment port project at Great Nicobar Island in the next few months, according to a senior official. It is close to finalising a detailed project report (DPR) for the Rs 41,000-crore project. The port, a part of a ‘mega-infrastructure’ project at the Great Nicobar Island, has drawn criticism from environmentalists as well as anthropologists over its impact on the island’s ecology and tribal communities. However, the government official said that the project has received a nod from the National Green Tribunal and will commence as planned. 

—🥃 The liquor industry in India is in for another roadblock. While direct advertising of liquor is already banned in the country, authorities now plan on cracking down on ‘surrogate ads’ and sponsoring of events by companies as well. Alcohol brands in the country usually promote non-alcoholic products to indirectly advertise their liquor. The government is likely to introduce fines and bans for companies on ads deemed misleading. 

—🚗 Maruti Suzuki India is not putting all its eggs in one basket. The company has been slow to hop on the electrification train – it is yet to release its first electric car. Chairman RC Bhargava addressed this, stating that they are anticipating a policy framework that supports all clean technologies. Bhargava said that the company is opting for a more “diversified” approach. He also said that they will be introducing electric vehicles in the near future. 

—🌃 Luxury home units have overtaken affordable housing units in sales in Gurugram. According to property consultants ANAROCK, Gurugram has become the most active real estate market in the National Capital Region (NCR) in recent years. In the first half of this calendar year, over 45% of the houses sold in NCR were in the luxury segment while 24% were in the affordable segment. 

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