Ola Electric shares witnessed a steep decline on Thursday, plunging close to 4% to hit a 52-week low. The company’s share price slipped to a little above Rs 30.
Aggarwal’s share sale triggers stock pressure
The sharp decline comes close on the heels of Bhavish Aggarwal’s decision to sell shares continuously over the last two days in the open market, amounting to over Rs 200 crore.
The move raised questions over the promoter’s confidence and could also unnerve investors amid the weak stock performance, potentially putting further pressure on pricing. As per Ola Electric’s statement, Bhavish has “undertaken a one-time, limited monetisation of a small portion of his personal stake to fully repay a promoter-level loan amounting to INR 260 crore.”
Pledged 3.93% stake to be released
With this personal stake sale, the company said that all the previously pledged 3.93% stake will be released. It further added that the promoter will still hold a 34% stake in the group. This would remain the highest stake among new-age companies, ensuring promoter control without any dilution.
The company also clarified that it aims to eliminate all promoter pledges, which would reduce risk and volatility going forward. It added that the founder wants “zero pledge overhang” to enable smoother operations without the pressure of debt.
Aggarwal sells shares to repay loan
Bhavish Aggarwal had taken a large loan against his shares and pledged his stake as collateral. To free himself from the loan burden, he is now selling shares to repay the loan and remove the pledge.
The share sale comes at a time when the company is not receiving an enthusiastic response to its EV business. Amid intense competition from other EV manufacturers, Ola Electric’s growth is witnessing sluggish demand, which has impacted its performance. The overall two-wheeler EV market is also not seeing the demand levels that were once projected, and this has further affected the business.
