Ola Electric Shares Fall To All-Time Low Amid Insolvency Plea Against Subsidiary
The shares of Ola Electric fell as much as 7.92% to Rs 46.51 apiece to hit fresh all-time low.
Shares of Ola Electric Mobility Ltd. fell nearly 8% on Monday to hit fresh all-time low after Rosmerta Digital Services Pvt. Ltd., a vendor of the company, sought the initiation of insolvency proceedings against a wholly owned subsidiary of the electric two-wheeler maker over non-payment of dues.
Rosmerta Digital Services, an operational creditor of Ola Electric Technologies Pvt. Ltd., has filed a petition at the National Company Law Tribunal in Bengaluru, alleging default in payments towards the services rendered, according to an exchange filing on Saturday. The petition seeks initiation of the corporate insolvency resolution process.
“The company has sought appropriate legal advice and it strongly disputes the claims made,” Ola Electric said in the filing.
Ola Electric Technologies is the automotive subsidiary of Ola Electric that makes scooters at the company's Futurefactory in Tamil Nadu. Ola Cell Technologies Pvt. Ltd. handles the battery business at the Gigafactory.
Rosmerta Digital Services was one of the vendors that handled vehicle registrations for Ola Electric on the government’s VAHAN website.
Ola Electric Share Price
The shares of Ola Electric fell as much as 7.92% to Rs 46.51 apiece to hit fresh all-time low. The stock pared losses to trade 7.68% lower at Rs 46.63 apiece, as of 1:31 p.m. This compares to a 0.42% advance in the NSE Nifty 50 Index.
It has fallen 48.98% since listing and 45.93% year-to-date. The relative strength index was at 18, indicating it is oversold.
Out of eight analysts tracking the company, four maintain a 'buy' rating, two recommend a 'hold,' and two suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 58.1%.
