Ola Electric zooms on liquidity, rising exposure to new stocks

Analysts believe any reversal in broad market trend may trigger a sharper selling in scrip

- NIKITA VASHISHT

The meteoric rise of Ola Electric's share price has left analysts and investors bewildered.

Yet, they suggest investors hold on to the stock as it remains a pure "momentum" play.

Since its listing on August 9, the stock has surged 92 per cent (till August 19) over its issue price of ₹76, taking its market capitalisation to a little over ₹63,000 crore. The issue was subscribed 4.45 times.

"It is surprising that despite the pessimism during the IPO and a tepid listing, the stock has managed to move sharply and has gathered good momentum. The fundamentals haven't changed in the last fortnight, so the logic for such a sharp run up is hard to find. As a strategy, however, traders or investors can chase the momentum but with strict stop-losses," Ambareesh Baliga, an independent market analyst.

On Monday, August 19, Ola Electric share price hit 10 per cent upper circuit to notch an all-time high of ₹146.03 per share on the BSE. By comparison, the BSE benchmark, Sensex, ended 12 points (0.02 per cent) lower.

Ola Electric's circuit limit was revised downwards from 20 per cent to 10 per cent last Friday (August 16) after a spectacular rally in mere five sessions.

What's fuelling the rally?