Ola Electric Board to Consider Fresh Funding on October 25
Ola Electric’s board will meet on October 25 to evaluate fresh capital raising plans, potentially through equity shares or other securities.
Key Takeaways
- Board meeting scheduled for October 25 to discuss fundraising
- Potential methods include private placements, QIP, preferential issues
- Company stock has declined over 40% from IPO price
- Comes amid regulatory challenges and employee suicide case
Funding Options Under Consideration
According to a stock exchange filing, Ola Electric may issue equity shares or other eligible securities. The board will evaluate various fundraising methods including private placement, qualified institutional placement (QIP), preferential issue or combinations thereof, subject to regulatory and shareholder approvals.
Recent Fundraising History
This development comes over a year after Ola Electric raised ₹5,500 crore through its IPO in August 2024. In May this year, the board approved raising up to ₹1,700 crore via non-convertible debentures, marking the first post-IPO fundraising round.
Despite these plans, a shareholder letter for Q1 FY2025 stated: “We are well funded for this year and the next from our June end cash balance of ₹3,197 crore and we don’t expect anything more needed for operating needs.”
Market Performance and Challenges
Ola Electric’s stock has declined over 40% from its IPO price of ₹76. On Thursday, the stock closed at ₹53.67 on the BSE.
The company recently expanded beyond vehicles with Ola Shakti, a battery energy storage system launched on October 16. However, it faces multiple challenges including:
- Discrepancies in reported sales
- Consumer complaints over vehicle quality
- Missing trade certificates at retail outlets
- Market share decline to 13.2% from 18.7% in August
Employee Suicide Case
The company is under scrutiny following the suicide of 38-year-old employee K Aravind, a Homologation Engineer who had worked with Ola Electric since 2022. A 28-page handwritten note found in his room accused company superiors of mental harassment and non-payment of salary and allowances.
Ola Electric confirmed that an FIR has been registered and said it has challenged the same in the Karnataka High Court.
