Ola Electric rises up to 2%, extends gains to second day after falling 26% in one month: Is the worst over for stock?

Ola Electric share price

The shares of Ola Electric Mobility rose more than 2 percent to their day's high on December 22, extending gains for the second consecutive session. This came after the stock dropped up to 26 percent in less than a month.

Earlier on Friday, the stock had jumped 10 percent. Despite the recent rebound, analysts advise investors to exercise caution, citing multiple factors.

CEO Bhavish Aggarwal completes stake sale to repay Rs 260-crore loan:

Ola Electric Mobility on December 18 announced that its promoter and CEO Bhavish Aggarwal has completed the sale of a small portion of his personal shareholding to fully repay promoter-level loan of approximately Rs 260 crore. This completely eliminates all promoter pledges, as it releases all 3.93 percent shares previously pledged for the loan.

"Following the transaction, the promoter group continues to hold 34.6% in Ola Electric, with no dilution of promoter control or change in long-term commitment. This was a planned, time-bound exercise executed entirely at the promoter’s personal level and has no impact on the company’s performance, operations, or strategic direction," the company said.

What lies ahead?

Aggarwal’s move eliminated a significant pledge overhang that had been cited as a source of volatility in recent weeks, even as overall trading levels remained under pressure, said Kalp Jain, Research Analyst, INVasset PMS.

“Prior to this development, the stock had been under heavy selling pressure, trading well below its IPO issue price and hitting fresh 52-week lows amid broader concerns. The recent rebound suggests that removing pledge-related uncertainty is being interpreted positively by the market,” he added.

However, whether this marks a sustained turnaround remains uncertain, as broader demand dynamics, competitive pressures in the electric two-wheeler segment and operational execution will likely continue to influence price action in the near term, the analyst added.

Khushi Mistry, Research Analyst at Bonanza, highlighted that Ola Electric’s market share slipped to the fifth place in November 25, with Hero MotoCorp’s Vida brand overtaking it. “The market share declined to around 7% as against more than 25% in the same period last year, led by increased regulatory scrutiny, operational setbacks and rising competition. Additionally, the recent GST council decision to reduce tax on ICE 2Ws to 18% from 28% while keeping GST rate on EV unchanged at 5% has narrowed the price gap, making ICE scooters cheaper and potentially dampening near term demand for EV 2Ws,” she added.

Ola Electric share price:

After rising 2 percent earlier during the day, Ola Electric shares erased most of the gains to close nearly flat at Rs 34.39 apiece.

Ola Electric shares had fallen more than 17 percent in just three sessions as founder and promoter Bhavish Aggarwal consistently sold part of his stake. As a result, the stock dropped sharply to hit an all-time low of Rs 30.76 per share on December 18. It lost more than 80 percent from record high of Rs 157.4 on August 20 last year.

The stock has fallen around 7 percent in the past five days, and around 16 percent in the past one month.

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