Shares of Ola Electric Mobility Ltd. experienced a significant decline today, dropping over 6% to a record low of ₹47.4. This downturn follows the company’s announcement that one of its subsidiaries is facing an insolvency petition filed by Rosmerta Digital Services, a creditor alleging payment defaults. Since its initial public offering (IPO) in August 2024 at ₹76 per share, Ola Electric’s stock has depreciated by approximately 38%.
The company has refuted the payment default allegations and is currently seeking legal counsel to address the situation. Beyond the insolvency issues, Ola Electric has been contending with declining sales, heightened regulatory scrutiny, workforce reductions, and restructuring efforts. In the October-December quarter, the company reported a loss of ₹5.64 billion, attributed to diminished demand and substantial discounts offered to attract customers.
Additionally, recent reports indicate that Ola Electric’s outlets have been subjected to raids by transport authorities across various states. These actions were taken in response to alleged violations of transport regulations, including operating without the necessary certifications required for transporting unregistered vehicles, displaying and offering test rides, and selling vehicles. The company has contested these allegations, deeming them “misplaced and prejudiced.”
Market analysts express concerns over Ola Electric’s current trajectory, noting that the company’s challenges could impact investor confidence and its position in the competitive electric vehicle market. As the situation unfolds, stakeholders are closely monitoring the company’s responses to these legal and regulatory challenges.
