Ola Electric, the EV two-wheeler company, faced a turbulent Tuesday on the stock market as its shares plummeted below the issue price of Rs 76 for the first time since its listing. The stock opened the day in the red and continued its downward trajectory, reaching an all-time low of Rs 74.84 during the trading session. By noon, Ola Electric shares were down 3% at Rs 75.25.
This downturn marks a significant reversal from the initial surge the company experienced following its August listing. Ola Electric shares had reached an all-time high of Rs 157.40 before embarking on a steep decline, losing almost 50% from its peak.
Market experts are predicting further drops if the stock remains below the IPO price for an extended period. They attribute this potential decline to selling pressure from institutional and retail investors. “Selling is prevalent at all levels,” they warn. “Given the ongoing weakness, investors should avoid this stock and instead focus on companies with robust fundamentals.”
The primary reasons for the slump in Ola Electric’s share price stem from the company’s disappointing sales figures and subpar service. Data from the government portal Vahan reveals that the company sold 24,665 electric scooters in September, a decrease from the 27,857 units sold in August. This decline in sales can be attributed to the intensifying competition in the EV two-wheeler market, with major automakers vying for a piece of the pie.
Adding to the woes, reports suggest that Ola Electric’s EV customers are encountering various issues, including software and hardware malfunctions, as well as difficulties accessing service centers. Specifically, the S1 series EV scooter, a flagship model for the company, has become a source of frustration for numerous customers who are experiencing recurring issues like malfunctioning hardware and software glitches. The scarcity of spare parts is further compounding the problem, resulting in prolonged repair delays.
As Ola Electric navigates these challenges, investors are left to grapple with the uncertain future of the company’s stock. The company’s ability to address its service issues, bolster sales, and effectively compete in the burgeoning EV market will be critical in determining the trajectory of its share price in the coming months.
