Ola Electric shares have been on a downward spiral for the past six months.
Bhavish Aggarwal, Ola founder, suffered a major blow on Monday when the shares of his Ola Electric Mobility Ltd tanked over 7 per cent. The stock slumped 7.23 per cent to hit a 52-week low of Rs 46.86 on the NSE. The market cap of the company now reached Rs 19571 crore, as of March 17. Ola Electric shares have been on a downward spiral for the past six months. The stock has lost 60 per cent, while the past month has seen a nearly 23 per cent decline. Founded in 2017, Ola Electric manufactures EVs and core components like battery packs, motors, and vehicle frames at its Ola Futurefactory.
The share was listed on BSE, NSE on August 9, 2024. The company had set the price band at Rs 76 per share. However, Ola electric shares skyrocketed on the listing day, following heavy buying interest and soared to hit a 52-week high of Rs 157.40 on NSE in the first few weeks of listing.
Why Ola Electric fell
The fall in the share price came after the company revealed its vehicle registration service provider Rosmerta Digital Services Ltd has sought the initiation of insolvency proceedings against its wholly-owned arm Ola Electric Technologies Pvt Ltd. In a regulatory filing, the company on Saturday said, “A petition has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by M/s. Rosmerta Digital Services Ltd, an operational creditor of Ola Electric Technologies Pvt Ltd.”
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The petition has been submitted before the National Company Law Tribunal’s Bengaluru Bench, alleging default in payment towards the services rendered by the operational creditor and seeking initiation of the corporate insolvency resolution process (CIRP) against Ola Electric Technologies Pvt Ltd, it added.
The company has sought appropriate legal advice and it strongly disputes the claims made, Ola Electric Mobility said, adding it would “take all necessary and appropriate steps to protect its interests and object to the allegations in the aforesaid matter”. The insolvency proceedings come at a time when Ola Electric Mobility is cutting around 1,000 jobs across different functions as part of a restructuring exercise to reduce losses.
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