Ola Electric Crashes 7% To Hit All-Time Low, Stock Down Over 23% In 1 Month

SUMMARY

Shares of Ola Electric Mobility plummeted over 7% in morning trade today to hit an all-time low at INR 46.40 apiece on the BSE

The free fall in Ola Electric share price came after Rosmerta filed an insolvency petition against its subsidiary Ola Electric Technologies for allegedly defaulting on payment

Ola Electric denied Rosmerta’s claims and said it has sought legal advice and will take necessary steps to prevent its interests

Shares of Ola Electric

Mobility plummeted over 7% in the morning trade today to hit an all-time low at INR 46.40 apiece on the BSE, dragged down by the company’s disclosure that one of its subsidiaries is facing bankruptcy proceedings.

In an exchange filing on Saturday (March 15), the Bhavish Aggarwal-led company said that Rosmerta Digital Services filed an insolvency plea before the Bengaluru bench of the National Company Law Tribunal (NCLT) against its subsidiary Ola Electric Technologies.

Rosmerta has alleged that Ola Electric Technologies defaulted on payments towards services rendered and sought the initiation of the corporate insolvency resolution process against the company.

However, Ola Electric Mobility disputed the claims made by Rosmerta and said it has sought appropriate legal advice and will take all necessary steps to protect its interests.

Last month, Ola Electric Mobility said it was renegotiating its terms of agreement with registration service providers Rosmerta and Shimnit India. At the time, the electric mobility company said these discussions would temporarily impact its EV registrations on the Vahan portal.

While Ola Electric Mobility claimed to have sold over 25,000 EVs last month, Vahan data showed registrations for its escooters tanked 66% month-on-month to 8,390 units.

Last week, Ola Electric Mobility said that cost-cutting measures are helping it reduce its monthly cash burn by INR 90 Cr. The company added that it was in the final stages of revamping its vehicle registration process.

The statement came amid reports that the Bhavish Aggarwal-led company is planning to axe over a thousand employees and contract workers to contain losses.

Ola Electric Mobility saw its consolidated net loss balloon over 50% to INR 564 Cr in the December quarter of the fiscal year 2024-25 (Q3 FY25) from INR 376 Cr in the year-ago quarter. Operating revenue declined 19% to INR 1,045 Cr during the quarter under review from INR 1,296 Cr in Q3 FY24.

The Central Consumer Protection Authority (CCPA) is also probing the EV maker on complaints about its after-sales service, delay in deliveries of vehicles, among others.

As a result of all these, the shares of Ola Electric Mobility have been on a downward trend for the last few months. The stock has tumbled over 23% over the past month. On a year-to-date basis, the stock has nosedived almost 46%.

The stock closed Monday’s trading session 7.18% lower at INR 46.91 on the BSE.