Ola Electric Mobility Ltd Shares Experience Significant Decline

Ola Electric Mobility Ltd has faced a notable drop in its stock value, continuing its downward trend on august 26 with a sharp 5% decline. The company's shares, which were listed at ₹76 apiece on the NSE earlier this month, had surged to a record high of ₹157.53 on august 20. However, since reaching this peak, the stock has decreased by 23.37%, falling 22% over the last five sessions.The company’s market capitalization has also taken a hit, dropping from ₹64,411 crore on august 19 to ₹53,327 crore as of august 26. This decline has prompted the BSE and NSE to place ola Electric’s securities under the short-term Additional Surveillance Measure (ASM) framework, a precautionary step to alert investors about high volatility.

Analysts have suggested that the stock might face further correction. Deven Choksey, Managing director at DRChoksey FinServ Pvt Ltd, noted that ola Electric is currently losing about ₹24,000 per vehicle. He indicated that for the company to become profitable, it will need to reduce battery costs, which could be achieved once it starts its own manufacturing. Choksey predicts that significant improvements might not be seen until 2025-26.Kranthi Bathini, director of Equity Strategy at WealthMills Securities, advised that investors with a high-risk tolerance and a long-term outlook might consider adding the stock to their portfolios, while those who invested for listing gains might want to take some profit.

Technically, the stock’s performance is concerning, with predictions suggesting a potential decline towards the ₹110 level in the near term. ravi Singh, Senior vice-president at Religare Broking, recommended waiting for a buying opportunity during the dip.

For the quarter ended june 30, ola Electric reported a 30% increase in net loss year-on-year, reaching ₹347 crore, despite a 32% rise in consolidated revenue from operations to ₹1,644 crore.

Ola Electric’s initial public offering (IPO) was valued at ₹6,145 crore, comprising a fresh issue of up to ₹5,500 crore and an Offer-for-Sale (OFS) of up to 8,49,41,997 equity shares. The company, founded in 2017, focuses on manufacturing electric vehicles and core components such as battery packs and motors at its ola Futurefactory.
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Balasahana Suresh

26/08/2024 06:12 PM