Ola Electric Stock Rises 2%: Why Investors Should Be Cautious

Ola Electric Mobility's shares have risen by over 2 percent, extending gains for the second consecutive session. This comes after the stock dropped by up to 26 percent in less than a month. Despite the recent rebound, analysts are advising investors to exercise caution, citing multiple factors.

Ola Electric's Recent Developments

On December 18, Ola Electric announced that its promoter and CEO, Bhavish Aggarwal, had completed the sale of a small portion of his personal shareholding to fully repay a promoter-level loan of approximately Rs 260 crore. This move eliminated all promoter pledges, releasing all 3.93 percent shares previously pledged for the loan.

The company stated that the promoter group continues to hold 34.6% in Ola Electric, with no dilution of promoter control or change in long-term commitment. This was a planned, time-bound exercise executed entirely at the promoter’s personal level and has no impact on the company’s performance, operations, or strategic direction.

Analysts' Insights

Kalp Jain, Research Analyst at INVasset PMS, said that Aggarwal’s move eliminated a significant pledge overhang that had been cited as a source of volatility in recent weeks. He added that the recent rebound suggests that removing pledge-related uncertainty is being interpreted positively by the market.

However, Jain also noted that whether this marks a sustained turnaround remains uncertain, as broader demand dynamics, competitive pressures in the electric two-wheeler segment, and operational execution will likely continue to influence price action in the near term.

Market Share and Competition

Khushi Mistry, Research Analyst at Bonanza, highlighted that Ola Electric’s market share slipped to the fifth place in November, with Hero MotoCorp’s Vida brand overtaking it. The market share declined to around 7% as against more than 25% in the same period last year, led by increased regulatory scrutiny, operational setbacks, and rising competition.

Mistry also noted that the recent GST council decision to reduce tax on ICE 2Ws to 18% from 28% while keeping GST rate on EV unchanged at 5% has narrowed the price gap, making ICE scooters cheaper and potentially dampening near-term demand for EV 2Ws.

Conclusion

Ola Electric shares had fallen more than 17 percent in just three sessions as founder and promoter Bhavish Aggarwal consistently sold part of his stake. The stock has fallen around 7 percent in the past five days and around 16 percent in the past one month. Investors should exercise caution and consider the broader market dynamics and competition before making any investment decisions.

Remember, this is perspective, not prediction. Do your own research and consider your own financial goals and risk tolerance before investing in the stock market.