India's top e-scooter maker Ola Electric Mobility surged 20% on Friday to reach a valuation of 586.64 billion rupees ($6.99 billion), after it launched a new line of motorcycles and on bets it will lower costs by using its own batteries.

The e-motorcycle launch is set to intensify competition in the world's second-largest two-wheeler market, where Ola Electric will face off with bigger rivals like Bajaj Auto , TVS Motor and Hero Motocorp.

Two-wheelers dominate Indian roads, with 18 million units sold last year.

Ola Electric, which listed its shares on August 9 after a $734 million initial public offering (IPO), has seen its shares jump 75% over the launch price of ₹76.

It was valued at $5.4 billion in a September 2023 pre-IPO funding round. But Ola Electric had slashed its valuation target to $4 billion for its IPO due to a correction in global tech companies and to attract participants to the stock offering.

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The e-scooter maker's plan to build an "all-important" battery and its efforts to make most of its EV parts in the country should attract investors looking to play the electrification theme in India, HSBC said in a note.

HSBC has a "buy" rating on the shares and a price target of ₹140, citing regulatory support and the company's ability to reduce costs.

On Wednesday, Ola Electric reported a wider first-quarter loss, hurt by subsidy cuts. On Thursday, the company launched a new series of e-motorcycles, expanding into an untapped segment. It plans to equip its vehicles with its own batteries by this time next year.

EV adoption is rising in India, but slowly, due to concerns around vehicles' range, lack of sufficient charging infrastructure and a low re-sale value.

Morgan Stanley said Ola Electric's motorcycle line addresses the "mass and premium" sides of the segment, noting that its close pricing to traditional motorcycles is likely to intensify competition.