Ola Electric’s stock took a sharp hit on Monday, tumbling over 7% and slipping below the ₹50 mark for the first time since its listing. The stock ended the day at ₹46.90, marking a record low and extending its recent downward trend. This latest plunge comes amid mounting concerns over an insolvency petition filed against the company’s subsidiary, Ola Electric Technologies Pvt Ltd. As news of the legal dispute spread, investor confidence took a hit, triggering a sell-off that further pressured Ola Electric’s already struggling stock. Let’s break down the key factors driving this decline and what it means for the electric vehicle (EV) giant.
Insolvency Petition Filed by Rosmerta Digital Services
The downturn in Ola Electric’s share price was triggered by an insolvency petition filed by Rosmerta Digital Services Ltd, a vehicle registration service provider. Rosmerta, serving as an operational creditor, submitted the petition to the Bengaluru Bench of the National Company Law Tribunal (NCLT), alleging payment defaults by Ola Electric Technologies Pvt Ltd for services rendered.
In response, Ola Electric has firmly denied these allegations, stating that it “strongly disputes the claims made by the vendor” and is actively seeking legal counsel to challenge the petition.
Source: LiveMint
What is an Insolvency Petition?
An insolvency petition is a legal document filed with a court, either by a debtor or a creditor (which in this case is Rosmerta), to initiate legal proceedings when a person or company (Ola Electric) is unable to pay their debts.
Rosmerta Digital Services Ltd: Company Overview
Rosmerta Digital Services Ltd is a rapidly expanding division of the Rosmerta Group, renowned for its leadership in e-governance, transport, and road safety in India. The company’s mission is to lead with cutting-edge technology and deliver innovative, tech-driven solutions across various sectors, aiming to positively impact the lives of 100 million Indians by 2030.
Key Aspects of Rosmerta Digital Services Ltd:
- Service Offerings: The company provides digitally enabled services, including vehicle ownership experience enhancements, last-mile service delivery, channel sales, spare parts, and accessories.
- Market Presence: Rosmerta Digital Services boasts a strong market presence with over 700 personnel across India and two decades of domain expertise. The company holds a 30% market share in Indian electric two-wheeler registrations as of the fiscal year 2024 and has processed over 200,000 vehicle registrations in the same period.
- Postponed IPO: In November 2024, Rosmerta Digital Services postponed its planned SME IPO, initially estimated at ₹206 crore. The decision followed adverse market conditions and complaints alleging lack of disclosure in the Draft Red Herring Prospectus (DRHP) and alleged market manipulation by close relatives of the promoters.
Know More: SEBI Registered Investment Advisory | Stock Investment Advisory
Impact on Share Price
The filing of the insolvency petition had an immediate and pronounced effect on Ola Electric’s stock performance. During Monday’s trading session, the share price opened at ₹49.98, reached an intraday high of ₹50.24, and plummeted to a low of ₹46.40 before closing at ₹46.93, down 7.2% from the previous close.
Source: NSE
This decline extends a troubling trend for the company. Since its initial public offering (IPO) in August 2024 at ₹76 per share, Ola Electric’s stock has depreciated by approximately 38%. Moreover, from its all-time high of ₹157, the stock has lost more than two-thirds of its value.
Underlying Challenges
Several factors have contributed to the downward trajectory of Ola Electric’s share price:
- Sales Performance: The company has been grappling with declining sales figures. In February 2025, Ola reported sales of 8,647 scooters, a figure that contrasts with the company’s earlier claims of over 25,000 units sold.
- Financial Losses: In the October-December quarter, Ola Electric reported a loss of ₹5.64 billion (approximately $64.9 million), attributed to reduced demand and substantial discounts offered to attract customers.
- Regulatory Scrutiny: The company has faced increased regulatory attention. In January 2025, India’s market regulator issued a warning to Ola Electric for sharing company information on social media prior to disclosing it to investors, highlighting lapses in timely and equal information dissemination.
- Operational Restructuring: Ola Electric has undergone significant restructuring efforts, including job cuts. In March 2025, reports indicated that the company planned to lay off over 1,000 employees and contract workers as part of its strategy to shift focus towards profitability.
Source: The New Indian Express
Market Reaction and Analyst Perspectives
The market has responded cautiously to these developments. As of the latest data, seven brokerages have rated the stock as a “hold,” with a median price target of ₹73.
Analysts are closely monitoring the situation, particularly the outcome of the insolvency petition and its potential impact on Ola Electric’s operations and financial health. The company’s ability to address these challenges effectively will be crucial in restoring investor confidence and stabilizing its share price.
Source: Economic Times
Conclusion
Ola Electric Mobility Limited is navigating a complex landscape marked by legal disputes, financial losses, and operational restructuring. The recent insolvency petition filed by Rosmerta Digital Services Ltd against its subsidiary has added to the company’s challenges, leading to a significant drop in its share price. As the situation unfolds, stakeholders will be keenly observing how Ola Electric addresses these issues to chart a path towards recovery and growth.
Related Posts
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
waitfor delay '0:0:5'--
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
