On Monday, shares of Ola Electric plunged more than 7% as its wholly owned subsidiary, Ola Electric Technologies Pvt Ltd, became the latest company to face an insolvency petition, touching a 52-week low. The stock closed 7.12% lower at ₹46.94 on the BSE and 7.04% lower at ₹46.95 on the NSE – a year’s low. The petition was filed by Rosmerta Digital Services Ltd. on the grounds that Ola Electric had not honoured its payment obligations for the services rendered. The case has been admitted to the National Company Law Tribunal (NCLT), Bengaluru, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, for the admission of a corporate insolvency resolution process (CIRP). Ola Electric Mobility Ltd., the suitor, said it disputes the claims made and has sought legal advice to protect its position. It also accepted the allegations and promised to do everything it takes to set the matter right. The case is significant as it has been filed when Ola Electric Mobility Ltd. is implementing a major restructuring that includes laying off about 1,000 people to cut the losses. The company has been experiencing financial issues even as it has been trying to build up its business in the electric vehicle niche. Hence, for the time being, investors are quite anxious about the financial situation of Ola Electric and its future. In the next few weeks, the company’s response to the insolvency petition and its restructuring initiatives will be watched closely.
Ola Electric shares plunge
