Investors Suffer Losses of Approximately Rs 40,000 Crore as Ola Electric Shares Plummet

Synopsis

Ola Electric shares have plummeted, leading to significant investor losses of around Rs 40,000 crore. The company's market capitalisation has fallen sharply due to increasing losses and service issues. Despite these challenges, Ola Electric aims to resolve service problems and expand its presence in the electric two-wheeler market.

Key Takeaways

Ola Electric shares have hit an all-time low.
Investors lost approximately Rs 40,000 crore.
Company's market capitalisation has decreased significantly.
Service-related challenges continue to impact performance.
Ola Electric is working on resolving service issues.

Mumbai, Feb 18 (NationPress) As shares of Ola Electric, led by Bhavish Aggarwal, continue to decline, investors have faced significant losses with around Rs 40,000 crore erased since the peak valuation of the company’s stock. Once valued at Rs 66,000 crore shortly after its initial surge post-listing, the firm's market capitalisation has now diminished to Rs 26,187.81 crore.

Making its debut at Rs 76 per share in August of the previous year, the stock has been under relentless selling pressure, dropping over 3 percent on Tuesday to reach an all-time low of Rs 58.84 on the Bombay Stock Exchange (BSE).

Factors contributing to the stock's decline include growing concerns over increasing losses, shrinking revenue, persistent service-related issues, and a general correction in the Indian stock market.

Recently, the electric two-wheeler firm reported a staggering 50 percent increase in its consolidated net loss, which escalated to Rs 564 crore in Q3 FY25 from Rs 376 crore in Q3 FY24.

Additionally, its operating revenue saw a 19 percent drop, decreasing from Rs 1,296 crore to Rs 1,045 crore in the same timeframe. In its filing with the stock exchange, the company attributed the heightened losses to “intense competition and service challenges” faced during the quarter.

Despite these challenges, the electric mobility aggregator has asserted that the service issues have been resolved and it remains committed to expanding its presence in the electric two-wheeler market.

However, the company’s market share in the electric two-wheeler sector fell below 20 percent in December, down from 49 percent in June 2024.

In a stock exchange filing dated February 7, the company mentioned that “October saw strong performance driven by festival sales, but the overall quarter was weak due to high competitive intensity and service challenges”.

The Central Consumer Protection Authority (CCPA) has issued a show-cause notice to Ola Electric regarding allegations of misleading advertising and unfair trade practices. The regulatory authority has requested multiple clarifications from the company as part of its ongoing investigation.

Nevertheless, Ola Electric has expanded its store network and asserts that it has addressed the service-related issues.