Ola Electric share price drops 6% amid insolvency proceedings against subsidiary by Rosmerta Digital Services

Ola Electric share price slumped almost 6% during Monday's trading session after Rosmerta Digital Services Ltd, its vehicle registration service provider, announced on Saturday that it intends to initiate insolvency proceedings against Ola's wholly-owned subsidiary, Ola Electric Technologies Pvt Ltd.

In a regulatory submission, the company announced that M/s. Rosmerta Digital Services Ltd, which is an operational creditor of Ola Electric Technologies Pvt Ltd, 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, claiming that there has been a default in payments owed for services provided by the operational creditor and requesting the commencement of the corporate insolvency resolution process (CIRP) against Ola Electric Technologies Pvt Ltd.

Ola Electric Mobility stated that it has sought proper legal counsel and firmly contests the allegations raised, adding that it will "take all necessary and appropriate measures to safeguard its interests and challenge the claims in the aforementioned case."

Last month, the company indicated that it was in the process of renegotiating its agreements with its partners—Rosmerta Digital Services Pvt Ltd and Shimnit India Pvt Ltd—to lower expenses and improve the efficiency of the registration process.

Ola Electric share price today

Ola Electric share price today opened at ₹50 apiece on the BSE. The stock touched an intraday high of ₹50.16 per share and an intraday low of ₹48.61 apiece.

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, stated that Ola Electric share price has broken below its IPO base low of 76, confirming a bearish structure with consistently lower highs and lower lows. “After a post-IPO climax at 157, the stock has been in a firm downtrend. With the break below 76, the next key extension target stands at 34, expected in the coming weeks. Unless a strong reversal emerges, selling pressure could intensify. Traders should remain cautious as the downtrend remains firmly in control,” said Jain.

Q3 Results

Ola Electric Mobility announced a widening consolidated net loss of ₹564 crore for the third quarter that ended on December 31, 2024, due to decreased revenue resulting from increased competition and one-time expenses to resolve service-related problems. The company had recorded a net loss of ₹376 crore during the same quarter last year, as stated in a regulatory announcement by Ola Electric Mobility Ltd.

Revenue from operations for the third quarter was ₹1,045 crore, down from ₹1,296 crore in the prior-year quarter, the company indicated. In this quarter, the company reported achieving its "highest-ever e2W registrations at 3.33 lakh units," which marks a 37.5 percent increase compared to the same period last year.

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