Ola Electric shares continue to fall, hitting a 52-week low. Today the stock fell further by 4.92%, taking it to ₹31.30, a record low. Amidst this sharp decline, the owners of the company are selling their stake. Ola Electric shares have fallen drastically since the listing, wiping out a large portion of investors’ wealth. The share price is now just over ₹30. The stock has declined 70% in the last one year. However, the reason for the recent decline is being attributed to the shares sold by the company’s owner Bhavish Aggarwal.
Shares worth more than ₹200 crore were sold
Bhavish Aggarwal has continuously sold Ola Electric shares in the open market in the last two days, the total value of which is more than ₹200 crore. This stake has been sold at a time when the stock market is already weak. The massive sale of shares by founders is worrying investors as it raises questions about the trust of promoters and leads to oversupply of shares in the market, putting further pressure on prices.
Why did Bhavish Aggarwal sell shares?
According to a company statement, Agarwal sold a small portion of his personal stake through the open market to fully repay the loan of ₹260 crore. The statement clarified that with this sale, all 3.93% shares already pledged will be released, thereby removing a “major bottleneck”.
It further said that even after this transaction, the promoter group will retain approximately 34% stake in Ola Electric, one of the highest among new generation listed companies, and there will be no dilution in promoter control or change in the long-term trust. The company further says that this action is aimed at eliminating all collateralized loans taken by the promoters, which could create unnecessary risk and volatility, and is part of the Founder’s belief that Ola Electric should operate without any collateralized loans and completely eliminate leverage.
huge loss to investors
Ola Electric’s share price has fallen 26 percent in a month, while it has fallen 50 percent in three months. It has declined by 32 percent in six months and by 70 percent in the last one year. The company’s shares have a 52-week high of ₹100.40. The market capitalization of Ola Electric has declined to ₹14,520 crore.