Ola Electric Shares Tank 8% TO Hit 52-Week Low Amid Insolvency Petition Against Subsidiary

Ola Electric Share Price Today: Ola Electric Mobility's stock plunged by over 8% to hit its 52-week-lowest mark of Rs 46.40 per share during the BSE intraday trading session on Monday amid concern over an insolvency petition against its subsidiary.

Ola Electric's stock price plummeted after Rosmerta Digital, its operational service provider, on Saturday announced its intention to initiate insolvency proceedings against Ola's wholly owned subsidiary Ola Electric.

The petition has been heard by the National Company Law Tribunal (NCLT)'s Bengaluru Bench. Rosmerta Digital filed the petition to request initiation of insolvency proceedings against Ola. The company, in its petition claimed that Ola defaulted on several payments due for services provided by the operational creditor.

Rosmerta Digital Services Limited has filed a petition against Ola Electric Technologies Private Limited under Section 9 of the Insolvency and Bankruptcy Code 2016 (IBC).

Reacting to the insolvency petition, Ola Electric Mobility has objected to the insolvency petition and has said that it is seeking proper legal counsel assistance in the matter. The company has said that it will take all necessary and appropriate steps to safeguard its interests and challenge in the case.

Ola Electric share price

Ola Electric share price hit their 52-week-lowest mark of Rs 46.40 per share on BSE on Monday. The company's share price fell by 8% in single day on Monday. Its market capitalisation stood at Rs 20,752.95 crore. The company's share price had hit a 52-week-high mark of Rs 157.53 per share on BSE on 20 August, 2024.

Ola Electric Q3 Results

The company witnessed a loss in its profit due to decline in revenue from increased competition. Ola Electric Mobility's net consolidated loss widened to Rs 564 crore for the quarter that ended on December 31, 2024.

The company had reported a loss of Rs 376 crore during the December quarter in the previous financial year. Whereas, its revenue from operations for the December quarter declined to Rs 1,045 crore from Rs 1,296 crore reported in the year-ago period.

Despite widening loss, the company reported "highest-ever e2W registrations at 3.33 lakh units." The company reported nearly 37.5 per cent increase EV sales compared to the same period in last year.

Ola job cuts

The news of petition to initiate insolvency proceedings against Ola Electric has come in the backdrop of job cuts initiated by the company across its different sections and segments.

The company announced in March earlier that it is trimming its workforce by 1,000 jobs in different sections as part of a restructuring exercise to reduce loss. The company made nearly 300-400 employees redundant and shortened its workforce citing stronger emphasis on profitability.

Last year, Ola Electric Mobility had removed around 500 jobs from their role without commenting on the exact number of redundancies in the latest round.

."We have restructured and automated our front-end operations, delivering improved margins, reduced costs, and enhanced customer experience while eliminating redundant roles for better productivity," the company said in its emailed response to Bloomberg.