Ola Electric Mobility Ltd's payments to Krutrim SI Designs Pvt., an AI company owned by its chairman, Bhavish Aggarwal, nearly quadrupled to ₹100 crore last year, prompting concerns from governance experts about related-party deals.
The payments comprised ₹54 crore for services purchased from Krutrim, up from ₹26 crore a year earlier, and a first-of-its-kind ₹46 crore advance for services that had been ordered but not yet invoiced as of 31 March, according to Ola Electric's annual related-party disclosures and a company spokesperson.
The transactions are not necessarily a compliance issue, but their size and the overlap between the boards of the two companies raise questions about how independently such payments are assessed — and whether shareholders have enough information to judge whether the deals are on arm's-length terms.
Srinath Sridharan, corporate adviser and who serves as an independent director on a few firms, said promoter-related transactions can raise questions about the role of the listed company’s board in approving such payments.
“The issue is not merely whether the transaction complied with the prescribed process, but whether the process provided genuine assurance that the listed company received an arm’s-length outcome,” Sridharan said.
Ola Electric’s six-member board comprises Aggarwal, Shradha Sharma, Krishnamurthy Venugopala Tenneti, Manoj Kumar Kohli, Arun Sarin and ND Shashank. Sharma, Kohli and Shashank are independent directors, while Tenneti and Sarin are non-executive, non-independent directors.
Krutrim’s five-member board has no independent directors. Besides Aggarwal, its two non-executive, non-independent directors are Tenneti and Sarin. The other two directors are Navendu Agarwal, and Deepak Rastogi.
The overlap is relevant because related-party transactions at listed companies are subject to board and audit committee oversight. “Regulation 23 of the SEBI LODR Regulations requires prior approval of related-party transactions by the listed entity’s Audit Committee, with approval resting with its independent directors. In this case, the presence of common board members across the two entities raises an important question about the independence of the assessment,” Sridharan said.
The increase in payments came even as Ola Electric’s overall expenses nearly halved to ₹3,245 crore during the year as the company pursued cost savings to control operating expenses.
An Ola Electric spokesperson said the transactions were conducted in the ordinary course of business and complied with applicable regulations.
“Ola Electric has fully migrated its cloud and AI infrastructure to Krutrim, and expenses to external cloud vendors now stand at zero,” the spokesperson said in an email reply.
“In this context, amounts paid to Krutrim are against services contracted and ordered by the company. Invoices for certain orders had not been raised as of the book-closing date, reflecting advances,” the spokesperson said.
The company also said the transactions were conducted at arm’s length. They have been approved through the company's established corporate governance processes and are fully compliant with the Companies Act, 2013 and SEBI (LODR) Regulations,” the spokesperson said.
Gaurav Pingle, partner at Forefront Legal Consulting, said transactions involving entities in which directors have a direct interest are assessed both from a compliance and governance perspective.
“This is critical as directors have direct control and management of their private entities. Listed entities can share some more information about such related party transactions, especially when the transaction volumes have increased significantly as compared to last financial year,” he said.
These payments come amid pending insolvency petitions against Ola Electric from two vendors over unpaid dues of over ₹40 crore.
The disclosures also show that Ola Electric’s trade payables fell to ₹5 crore as of 31 March 2026 from ₹26 crore a year earlier. This could indicate that ₹21 crore of outstanding dues were settled during the year, although Mint could not independently verify how the reduction in trade payables was settled.
Trade payables represent amounts owed by a company for goods or services received. They can be settled through cash payments or other adjustments between the parties.
Krutrim AI Designs LLP is the holding company and is wholly owned by BA Family Office LLP, Aggarwal’s family office. It owns nearly 90% of Krutrim SI Designs, the operating entity. Venture capital firm Matrix Partners invested $50 million in Krutrim SI Designs in December 2023 for a 7% stake, valuing the company at more than $1 billion.