Ola Electric shares plunge to 52-week low amid insolvency petition
The fall in the company’s stock price comes after Rosmerta Digital Services filed a petition against Ola Electric Technologies under Section 9 of the Insolvency and Bankruptcy Code.
EV company Ola Electric’s shares fell by about 6% on Monday following a petition filed by Rosmerta Digital Services under Section 9 of the Insolvency and Bankruptcy Code against its EV-making unit.
Ola Electric's shares hit a 52-week low of Rs 47.59 apiece as of 10:14 AM today.
On Saturday, the Bhavish Aggarwal-led company informed stock exchanges that one of its operational creditors, Rosmerta Digital Services, has filed a petition before the National Company Law Tribunal - Bengaluru Bench alleging default in payments towards services rendered.
In February, the company said it was renegotiating its terms of agreement with Rosmerta Digital Services and Shimnit India Private Ltd to reduce costs and help enhance registration efficiencies. Due to these negotiations, the company’s registration numbers on Vahan portal took a hit during the month.
However, the company said that it sold 25,000 units during the month though data on the portal showed that it had sold only 8,390 units.
The petition is the latest in a series of trouble brewing at the Bengaluru-based company. On March 3, the company’s cell unit, Ola Cell Technologies, received a letter from IFCI Limited stating that it has not achieved the target set under the Production Linked Incentive Advanced Chemistry Cell Scheme (PLI ACC).
Adding to these challenges, the company is also grappling with widening losses which has prompted a series of measures, including laying off around 1,000 employees and shutting down regional warehouses.
These cost-cutting measures have positioned the company for profitability by the next fiscal, it said last week. The Network Transformation and Opex Reduction Programme, has churned in cost savings of Rs 90 crore per month.
As a result, Ola Electric expects to achieve EBITDA breakeven for its automotive segment in the first quarter of FY26, with the financial impact of these initiatives taking full effect from April 2025
It had reported widening losses in Q3 FY25, with a net loss of Rs 562 crore, up from Rs 374 crore a year earlier, as revenue from operations declined 19.4% to Rs 1,045 crore.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director at Ola Electric.)
Edited by Affirunisa Kankudti