Recently, the listed company Ola Electric Mobility caused significant financial losses to its investors. The stock has fallen nearly 55% from its peak, resulting in an estimated loss of around ₹38,000 crore for investors. On Tuesday, the stock closed at ₹70, compared to its lifetime high of ₹157 on August 20. Currently, the stock is trading at its lowest levels.
In August 2024, Ola Electric launched its IPO at ₹76 per share. After being listed, the stock gained momentum and reached ₹157 on August 20, doubling its issue price. At that time, the company’s market capitalization soared to approximately ₹69,000 crore. However, it has now plummeted to just ₹31,000 crore.
The primary reasons for the decline in Ola Electric’s share price are attributed to poor customer service and product quality. Several customers have reported technical issues with the vehicles. One customer mentioned having to replace the brake shoes three times within four months. Another customer from Varanasi reported recurring battery and software problems, causing the scooter to frequently freeze or hang.
Ola Electric’s poor financial performance is another significant reason for the decline in its stock price. In the second quarter of the fiscal year 2024-25, the company reported a loss of ₹495 crore, with a revenue of ₹1,214 crore. In the previous quarter, the company had a higher revenue of ₹1,644 crore but still recorded a loss of ₹347 crore.
A public spat on social media between Ola’s founder Bhavish Aggarwal and comedian Kunal Kamra further tarnished the company’s reputation. Kamra shared videos and photos on his account highlighting customer complaints and issues with Ola scooters. This added to the company’s negative publicity, as widespread acknowledgment of such problems impacted investor confidence. The resulting damage to the company’s image contributed to the decline in its stock value.