Ola Electric Mobility shares resumed their climb in Friday's trade after a single-day halt. The stock jumped 9.46 per cent to hit a day high of Rs 56.55. Today's rebound in the share price came after the pure-play electric vehicle (EV) firm clarified that the temporary sales backlog in February "was due to ongoing negotiations with our vendors responsible for vehicle registrations."
The Bhavish Aggarwal-led company mentioned that it had received inquiries from the Ministry of Road Transport and Highways of India (MORTH), the Ministry of Heavy Industries and authorities from four states, adding that it is actively working on responding to these requests.
Ola Electric further explained that the backlog is being quickly addressed, with daily registrations now exceeding 50 per cent of the average daily sales over the past three months. It also stated that 40 per cent of the February backlog had been resolved and the remaining issues should be cleared by the end of March 2025.
Recently, the EV firm said its creditor Rosmerta Digital Services has filed an insolvency petition against the pure-play electric vehicle (EV). "The petition has been submitted before the National Company Law Tribunal – Bengaluru Bench (NCLT, Bengaluru), alleging to default in payment towards the services rendered by the Operational Creditor and seeking initiation of the Corporate Insolvency Resolution Process ("CIRP") against the Ola Electric Technologies Pvt Ltd," Ola Electric stated.
"The company has sought appropriate legal advice and it strongly disputes the claims made. It will take all necessary and appropriate steps to protect its interests and object to the allegations in the aforesaid matter," it added.
A few market experts largely suggested investors to avoid averaging the stock at current levels. One of them suggested that investors "can play it but only for a short bounce and get out" while another recommended focussing on established players other than Ola Electric.
"Those who are struck at Rs 100-plus level, don't average the stock at this point. Putting your money somewhere else could help you to generate a good alpha. Technically, it could be a good buy at current levels but only for a short-term view. One can consider buying it with a stop loss of Rs 48. Just play the stock only for a short bounce and get out. I don't think that the stock will move above Rs 65 levels in the next three months. If you are struct at higher levels, just the investment be. Whenever your price comes in, let's say in the next 1 or 2 years, you exit it but do not average this stock. I don't see any significant upside above Rs 65-70 levels. Those looking to exit should do it in a partial way, keeping a trailing stop loss," Mitesh Panchal, a Sebi-registered analyst, told Business Today.
"There is a Rs 1,500 crore-plus and counting loss on the company's balance sheet. There was a big issue in terms of customer dissatisfaction. Also, there were governance, disclosure-related and insolvency issues. So, if one wants to look at the EV-related play, then focus on established players other than Ola Electric," said Gaurang Shah, Senior VP at Geojit Financial.
Founded in 2017, Ola Electric primarily manufactures EVs and certain core components such as battery packs, motors and vehicle frames at the Ola Futurefactory. As of December 2024, promoters held a 36.78 per cent stake in the E2W player.