Synopsis
On March 10, Ola Electric's shares dropped nearly 4% amidst reports of regulatory issues, including vehicle seizures and showroom closures. The company faces scrutiny from transport authorities for alleged violations of the Motor Vehicles Act, although it has denied these claims.Key Takeaways
- Ola Electric's stock dropped by nearly 4% amid regulatory scrutiny.
- Reports of raids and vehicle seizures have surfaced.
- The company refutes claims, calling reports biased.
- Only 100 out of 3,400 showrooms have necessary trade certificates.
- Stock is trading over 60% below its peak since listing.
New Delhi, March 10 (NationPress) Shares of the electric vehicle manufacturer Ola Electric plummeted by nearly 4 percent on Monday, following allegations of raids, vehicle seizures, and showroom closures associated with the company.
Reports indicate that the two-wheeler producer is encountering regulatory challenges and has received warning letters from the government for purportedly breaching stipulations under India’s Motor Vehicles Act.
Due to numerous customer complaints, transport authorities across various states have reportedly conducted raids, shut down showrooms, and confiscated vehicles.
The company has also been served with show-cause notices regarding these claimed violations, the report stated.
Nonetheless, an Ola spokesperson refuted these assertions, branding the reports as “biased” and “misguided”.
The company affirmed that its distribution centers and warehouses throughout India adhere to the regulations of the Motor Vehicles Act and that it keeps unregistered vehicles at these sites in alignment with the law.
In light of these revelations, shares of the company led by Bhavish Aggarwal faced renewed selling pressure, dropping over 4 percent to a day low of Rs 54.11 each on the Bombay Stock Exchange (BSE).
It did show some recovery and was trading at Rs 54.46, down by 3.66 percent or Rs 2.07.
The stock was nearing its 52-week low of Rs 53.71, which it hit recently on March 3 amidst rumors that the company is contemplating laying off over 1,000 employees to mitigate losses.
Since the start of 2025, Ola Electric's stock has plunged by 36 percent and is currently trading over 60 percent below its peak since its listing in August.
According to available data, only about 100 out of 3,400 showrooms possessed the trade certificates mandated under India’s Motor Vehicles Act.
This suggests that over 95 percent of the assessed showrooms lacked the essential certification to display, market, or conduct test rides for unregistered vehicles.
At least six transport officials are reportedly probing Ola Electric for potential infractions.
