Ola Electric Share Price Decline by 4% Amid Insolvency Petition

Ola Electric's share price experienced a significant drop following the announcement that Rosmerta Digital Services Ltd. intends to file for insolvency against Ola Electric Technologies Pvt Ltd., a wholly-owned subsidiary of Ola Electric Mobility Ltd. This news led to an almost 4% fall in Ola Electric's share price during Monday's trading session, as reported on March 17, 2025. Similarly, another report on the same day noted that Ola Electric's shares slid by 7%, falling below ₹50 on the BSE after this disclosure. The share price reached a day's low of ₹47.14 on BSE.

Insolvency Proceedings by Rosmerta Digital Services

Rosmerta Digital Services Ltd., which serves as an operational creditor providing vehicle registration services to Ola Electric Technologies, has filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The petition has been presented to the Bengaluru Bench of the National Company Law Tribunal (NCLT). Rosmerta Digital claims a default in payments owed for the services provided and is requesting the initiation of the Corporate Insolvency Resolution Process (CIRP) against Ola Electric Technologies Pvt Ltd.

Ola Electric's Response and Stance

Ola Electric Mobility stated that it firmly contests the allegations raised by Rosmerta Digital Services. The company has sought proper legal counsel and has assured stakeholders that it will take all necessary and appropriate measures to safeguard its interests and challenge the claims in the aforementioned case. It was also revealed that last month, Ola Electric indicated that it was in the process of renegotiating its agreements with its partners, including Rosmerta Digital Services Pvt Ltd., to lower expenses and improve the efficiency of the registration process.

Market Analysis of Ola Electric's Share Performance

According to Anshul Jain, Head of Research at Lakshmishree Investment and Securities, Ola Electric's share price has broken below its IPO base low of ₹76, indicating a bearish structure characterized by consistently lower highs and lower lows. Jain noted that after a post-IPO high of ₹157, the stock has been in a firm downtrend, and with the break below ₹76, the next key extension target is ₹34, expected in the coming weeks. He advised traders to remain cautious as the downtrend appears to be firmly in control unless a strong reversal emerges. The year-to-date decline in Ola Electric shares is reported as 41.39%, with a 54.71% drop over the past six months and a 46.13% fall in the last three months. In the last month alone, the price has fallen by 21.34%. On the day of the news, the share price opened at ₹50 apiece on the BSE, reaching an intraday high of ₹50.16 and a low of ₹48.6. On the preceding Thursday, the stock had closed at ₹50.54 on the BSE, marking a 1.12% decrease.

Ola Electric's Financial Performance

In the third quarter that ended on December 31, 2024, Ola Electric Mobility announced a widening consolidated net loss of ₹564 crore. This increase in loss compared to the ₹376 crore net loss in the same quarter of the previous year was attributed to decreased revenue resulting from increased competition and one-time expenses related to resolving service-related problems. The revenue from operations for the third quarter was ₹1,045 crore, down from ₹1,296 crore in the prior-year quarter. Despite the financial setbacks, the company reported achieving its "highest-ever e2W registrations at 3.33 lakh units" during this quarter, representing a 37.5 percent increase compared to the same period last year.

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