Ola Electric board to consider fresh funding plans at October 25 board meeting

Ola Electric, the Bengaluru-based electric two-wheeler manufacturer, is scheduled to hold a board meeting on Saturday, 25 October, to consider a proposal for raising capital. According to a stock exchange filing, the company may issue equity shares or any other eligible securities.

The board will evaluate various fundraising methods, including private placement, qualified institutional placement (QIP), preferential issue or a combination thereof, subject to regulatory and company shareholders' approval.

This development comes over a year after Ola Electric raised ₹5,500 crore through a fresh issue in its initial public offering (IPO) in August 2024.

Previous fundraising round

In May this year, the board approved raising upto ₹1,700 crore via non-convertible debentures and other eligible debt instruments, marking the first post-IPO fundraising round, The Economic Times reported.

A shareholder letter for Q1 FY2025 said: “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.”

Share performance and market standing

Ola Electric's stock has declined over 40% from its IPO price of ₹76. On Thursday, the stock closed at ₹53.67 apiece on the Bombay Stock Exchange (BSE).

The company recently expanded its portfolio beyond vehicles with the launch of its first non-vehicle product, Ola Shakti, a battery energy storage system, on 16 October.

However, Ola Electric has faced regulatory and operational challenges in recent months, including discrepancies in reported sales, consumer complaints over vehicle quality and missing trade certificates at retail outlets. Additionally, its market share slipped to the fourth spot to 13.2% from 18.7% in August, ET reported.

Controversy linked to suicide

The company is under scrutiny following the suicide of a 38-year-old employee, K Aravind, who was working with Ola Electric as a Homologation Engineer in Koramangala since 2022.

A 28-page handwritten note was found in his room, accusing the company superiors of mental harassment, non-payment of salary and allowances. The employee allegedly died by suicide after consuming poison, Mint reported, citing the suicide note.

Ola Electric confirmed that a first information report (FIR) had been registered and said it had challenged the same in the Karnataka High Court.