On Monday, shares of Ola Electric Mobility Limited fell 7.23 percent, or Rs 3.65, to a record low of Rs 46.86 on the National Stock Exchange (NSE).
With this decline, Ola Electric’s shares fell below Rs 50 for the first time. The company’s shares are currently down 37% from their issue price of Rs 76 a share, and 70% from their post-listing high of Rs 157.
The stock has fallen 18% in only the last month. The dramatic fall occurred after the company reported that Rosmerta Digital Services had filed an insolvency action against its wholly owned subsidiary, Ola Electric Technologies.
In a filing over the weekend, the business disclosed that Rosmerta Digital Services had approached the National business Law Tribunal (NCLT) in Bengaluru to commence corporate insolvency proceedings against Ola Electric Technologies.
Ola Electric responded by stating that it vehemently opposes the charges and has sought legal assistance. The corporation stated that it will take all necessary efforts to preserve its interests and dispute the charges contained in the petition.
“We wish to inform you that a petition has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by M/s. Rosmerta Digital Services Ltd, an operational creditor of Ola Electric Technologies Pvt Ltd, a wholly owned subsidiary of Ola Electric Mobility Ltd,” the company led by Bhavish Agrawal informed exchanges over the weekend.
It also stated that the petition was filed before the National Company Law Tribunal’s Bengaluru Bench (NCLT, Bengaluru), alleging a failure to pay for services rendered by the operational creditor and seeking the initiation of the Corporate Insolvency Resolution Process (“CIRP”) against Ola Electric Technologies Pvt Ltd.
Ola Electric has recently garnered attention for its sales performance. According to figures from the Ministry of Road Transport and Highways, the business sold 8,647 scooters in February. However, Ola Electric claims that its actual sales surpassed 25,000 units.
Last month, the business said that it was renegotiating contracts with its automobile registration companies.
This, it stated, would have a temporary impact on vehicle registrations on the government portal but not on actual sales.
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