Ola Electric Mobility Ltd Share relief for investors, stock Move Up Side more than 5 percent after 1 pm
Ola Electric Mobility Ltd. has recently been in the spotlight due to significant fluctuations in its stock performance. As of September 9, 2024, the share price experienced a notable decline, falling over 4% to an intra-day low of ₹105.15. This drop coincided with the end of a one-month lock-in period for shareholders, which allowed approximately 18.18 crore shares to become eligible for trading. This situation has raised concerns among investors about potential selling pressure and market stability.
Main Points
Today, Ola Electric’s stock opened at ₹110.00 and reached a high of ₹116.00, with a low of ₹103.50. The previous close was ₹109.57, and the trading volume was substantial at over 82.45 million shares, leading to a total traded value of ₹944 crore. The stock has seen a 52-week low of ₹76.00 and a high of ₹157.40, indicating a volatile trading history since its IPO.
Market Context
The share price of Ola Electric has been on a corrective path following its IPO, where it initially doubled from its offering price of ₹76. Despite reaching an all-time high of ₹157.40, the stock has since declined by approximately 30%. This decline is attributed to increased competition in the electric vehicle (EV) market, particularly from established players like TVS Motor and Bajaj Auto, which have been gaining market share. As of August 2024, Ola Electric’s market share has dropped to 32%, while competitors are ramping up their production and sales efforts, further intensifying the competitive landscape.
Factors Influencing Stock Performance
Lock-in Period Expiration
The expiration of the lock-in period for anchor investors has been a significant factor influencing the stock’s performance. The lock-in rules are designed to stabilize a stock’s price post-IPO by preventing early investors from flooding the market with shares. With 4% of the company’s outstanding equity now eligible for trading, there are concerns that this could lead to increased selling pressure, further impacting the stock price.
Competitive Landscape
Ola Electric faces stiff competition in the electric scooter market. Competitors like TVS and Bajaj have been enhancing their product offerings and market strategies, which has resulted in a decline in Ola’s market share. Analysts predict that the upcoming months will present challenges for Ola Electric as these competitors continue to strengthen their positions.
Financial Performance
In the first quarter of FY24, Ola Electric reported a 32% year-on-year increase in revenue. However, the company also faced a widening loss of ₹347 crore, compared to a loss of ₹267 crore in the same quarter the previous year. This financial performance reflects the challenges the company faces in balancing growth with profitability in a competitive market.
Future Outlook
Despite the current challenges, some analysts remain optimistic about Ola Electric’s future. HSBC has highlighted a positive risk-reward scenario for the company, expecting significant reductions in EV manufacturing costs by FY27-28. This could potentially enhance Ola Electric’s competitive edge as the market evolves and demand for electric vehicles continues to grow.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
