Ola Electric Stock Plummets Over 70% After Insolvency Filing Against Subsidiary
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Synopsis
On March 17, Ola Electric Mobility Limited's shares fell by 7.23%, reaching a historic low of Rs 46.86 on the NSE, following an insolvency petition against its subsidiary. The company's stock is down 70% from its peak, and it disputes the claims made in the petition. Recent sales data shows significant sales performance, despite challenges.
Key Takeaways
- Ola Electric shares fell 7.23%, hitting Rs 46.86.
- Stock is down 70% from its peak.
- Insolvency petition filed against Ola Electric Technologies.
- Company disputes the claims.
- Sales reportedly above 25,000 units in February.
Mumbai, March 17 (NationPress) Shares of Ola Electric Mobility Limited plummeted by 7.23 percent, or Rs 3.65, on Monday, reaching a historic low of Rs 46.86 on the National Stock Exchange (NSE).
This decline marks the first time that Ola Electric's stock has dipped below the Rs 50 threshold. The company's shares have now decreased by 37 percent from its initial offering price of Rs 76 per share and have fallen an astonishing 70 percent from its peak post-listing value of Rs 157.
In just the last month, the stock has seen an 18 percent drop. This drastic fall follows the announcement that an insolvency petition was filed against its fully-owned subsidiary, Ola Electric Technologies, by Rosmerta Digital Services.
In a regulatory filing over the weekend, the company verified that Rosmerta Digital Services had petitioned the National Company Law Tribunal (NCLT) in Bengaluru, aiming to commence corporate insolvency proceedings against Ola Electric Technologies.
In response, Ola Electric expressed strong disagreement with the claims and has sought legal counsel. The company reassured stakeholders that it will take all essential measures to defend its interests and contest the allegations presented in the petition.
"We wish to notify that a petition has been lodged under Section 9 of the Insolvency and Bankruptcy Code, 2016 by M/s. Rosmerta Digital Services Ltd, an Operational Creditor of Ola Electric Technologies Pvt Ltd, a wholly-owned subsidiary of Ola Electric Mobility Ltd," the company, led by Bhavish Agrawal, informed exchanges over the weekend.
Additionally, the company noted that the petition has been filed with the Bengaluru Bench of the NCLT, alleging a default in payment for services provided by the operational creditor, and requesting the initiation of the Corporate Insolvency Resolution Process (CIRP) against Ola Electric Technologies Pvt Ltd.
Recently, Ola Electric has been in the limelight due to its sales outcomes. According to information from the Ministry of Road Transport and Highways, the company sold 8,647 scooters in February. However, Ola Electric asserts that its actual sales surpassed 25,000 units.
Last month, the company indicated that it was renegotiating contracts with its vehicle registration agencies.
It clarified that this would temporarily affect vehicle registrations on the government portal but would not impact actual sales.
