Ola Electric Shares Faces Pressure as 18 Crore Shares Become Tradable: What It Means for Investors
Ola Electric Mobility Ltd’s shares experienced significant fluctuations amid market reactions to the end of a lock-in period for anchor investors. The stock fell by 4.26% earlier in the day, hitting a low of ₹97.85, before recovering slightly to trade at approximately ₹100.04 by the afternoon. This decline marks a notable decrease of about 36.30% from its peak price of ₹157.53, achieved on August 20, 2024.
Main Points
The recent price movements of Ola Electric shares have raised concerns among investors and analysts alike. The end of the lock-in period allowed around 18 crore shares to become freely tradable, leading to increased selling pressure in the market. This situation is often referred to as “profit-booking,” where investors capitalize on earlier gains, resulting in downward pressure on stock prices.
Full Details
Ola Electric’s stock has been under scrutiny since its initial public offering (IPO), which saw an overwhelming subscription rate of over 150 times. The company raised ₹2,763 crore from anchor investors, with shares initially priced at ₹76 each. However, since reaching its all-time high, the stock has struggled to maintain momentum.
Analysts have expressed mixed sentiments regarding the stock’s future performance. Some suggest that the current dip could present a buying opportunity for long-term investors, while others recommend caution due to the company’s widening losses and high debt levels. For instance, Ola reported a consolidated net loss of ₹347 crore for the first quarter of FY25, up from ₹267 crore in the same period last year.
Market experts have identified critical levels that traders should monitor closely:
- Support Level: Analysts indicate that strong support is present at ₹100. A daily close below this level could signal further declines, potentially targeting ₹76 in the near term.
- Resistance Level: Conversely, resistance is noted at ₹120. A decisive break above this level could lead to a recovery phase for the stock.
Trading Volume and Market Capitalization
Today’s trading volume was notably high, with approximately 78.97 lakh shares changing hands on the Bombay Stock Exchange (BSE), surpassing the two-week average volume of 45.36 lakh shares. The market capitalization of Ola Electric currently stands at around ₹50,923 crore.
Despite the volatility, some analysts maintain a cautious optimism regarding Ola Electric’s long-term prospects:
- Long-Term View: Analysts suggest that investors with a high-risk appetite may consider accumulating shares at lower levels for potential long-term gains.
- Short-Term Strategy: For short-term traders, experts recommend avoiding new positions until clearer signals emerge from upcoming quarterly results and market behavior.
As Ola Electric navigates this turbulent phase marked by profit-booking and heightened trading activity, investors are advised to stay informed about key support and resistance levels while considering their individual risk tolerance and investment strategies.
