Ola Electric shares drop nearly 5% following report of raid
Ola Electric shares fell as much as 6% to Rs 53.15 in intraday trade on the BSE, before settling at Rs 53.80.
Shares of closed down 4.85% on Monday, following reports of raids by authorities over violation of transport regulations.
Around 95% of the vehicle outlets of the Bhavish Aggarwal-led two-wheeler manufacturer did not have the basic certification required to transport unregistered vehicles, display and offer test rides, and sell, Bloomberg reported on Friday citing its investigation. The company has a total of 4,000 stores.
Responding to customer complaints, the authorities conducted raids on showrooms across the states, seized vehicles, shut outlets and sent show-cause notices, the report said citing documents reviewed by it.
In response, the company spokesperson said Bloomberg's investigation report on non-compliance was “misplaced and prejudiced.” Ola’s distribution centres and warehouses maintain an inventory of unregistered vehicles in compliance with the regulations under the Motor Vehicles Act, and the company has all the necessary approvals, he added.
Ola Electric shares fell as much as 6% to Rs 53.15 in intraday trade on the BSE, before settling at Rs 53.80. The stock has lost 65.8% of its value from its 52-week high of Rs 157.53 in August last year.
The EV maker is cutting more than 1,000 jobs in its second round of layoffs, another report in Bloomberg said earlier this month. This workforce trim comes after the company let go of 500 people in November last year in its efforts to reduce losses.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)