Ola Electric Shares Rebound 14% After Prolonged Decline

SUMMARY

After plunging 7% yesterday, shares of Ola Electric surged nearly 14% to INR 53.48 during the intraday trading today

The jump in shares came as the broader market also saw a rally today. Benchmark indices Sensex and Nifty 50 were up 1.23% and 1.19%, respectively.

The EV company’s subsidiary Ola Electric Technologies is facing an insolvency petition for allegedly defaulting on its payment obligations

After a steep decline over the last few months, shares of Ola Electric

zoomed 14% to INR 53.48 during early trading on the BSE today.

At 11:48 AM, the stock was trading at INR 53.24 apiece. At this level, the company’s market capitalisation stood at INR 23,483.26 Cr and about 9 Cr shares were traded during the day till then.

The jump in shares came as the broader market also saw a rally today. Benchmark indices Sensex and Nifty 50 were up 1.23% and 1.19%, respectively.

Shares of Ola Electric plunged nearly 7% yesterday following the company’s disclosure that one of its subsidiaries is facing bankruptcy proceedings.

Rosmerta Digital Services, which provides registration services to Ola Electric, filed a plea before the Bengaluru bench of the National Company Law Tribunal (NCLT) against Ola Electric Technologies, alleging that it defaulted on its payments.

Ola Electric disputed these claims and stated that it will take the necessary legal steps to safeguard its interests.

The development came almost a month after the Bhavish Aggarwal-led EV company said that it was reconsidering its agreements with registration service providers Rosmerta and Shimnit India. At the time, Ola Electric said that these discussions would temporarily impact its EV registrations on the Vahan portal.

A report also said that Ola Electric was exploring in-house vehicle registrations as part of a broader cost-cutting exercise.

Last week, Ola Electric said that it has been able to reduce its monthly cash burn by INR 90 Cr led by the cost-cutting measures. However, the company said it was in the final stages of revamping its vehicle registration process.

As part of the cost-cutting exercise, the company was also reported to be in the process of cutting over 1000 jobs.

Ola Electric’s net loss zoomed more than 50% to INR 564 Cr in the December quarter of the fiscal year 2024-25 (Q3 FY25) from INR 376 Cr a year ago and its operating revenue declined 19% to INR 1,045 Cr in this period.

Besides, the company is also facing intense competition in the EV two-wheeler space. As a result, its shares have been on a free fall over the last few months. The stock has fallen 36.84% in March so far and 45% year to date.