Ola Electric Mobility’s fundraise of up to ₹1,500 crore should give its turnaround journey more runway, especially since it is burning cash while investing heavily in manufacturing and battery technology.
But coming just three months after it raised ₹780 crore through a qualified institutional placement, the latest fundraise failed to cheer investors, with the stock declining 1.5%. This reaction is akin to the previous fundraise, following which the stock fell 13% over time. The share is down 37% in the past one year.
Clearly, infusion of fresh capital alone has not been enough to restore confidence amid persistent market-share loss, leadership churn, and regulatory concerns.
Market share
In August, Ola registered 13,916 electric two-wheelers, down 29% year-on-year versus the industry’s 68% growth, Vahan data showed. As a result, Ola’s market share fell to just 7.6%, from 17.7% a year earlier.
The trend holds through FY27 to date as well. Ola’s registrations declined 26% year-on-year, while the industry grew 73%, compressing Ola’s market share to 7.9% from 18.4% in the year-ago period.
While customer grievances over product and service quality are finding their way into litigation, Ola has faced regulatory scrutiny over its disclosures.
Senior management churn remains a concern. Following the resignation of its chief financial officer in January, and its company secretary and compliance officer twice in just about a year, the latest resignation of chief operating officer Hyun Shik Park is worrying. Park had been in charge of a strategic focus area for three years– gigafactory for mass-manufacture of battery cells.
Though Ola is expanding manufacturing capabilities and shifting from direct-to-consumer towards a dealer-led distribution model to address service bottlenecks, earnings are yet to reflect these efforts.
The June quarter (Q1FY27) saw Ola’s net loss narrow to ₹336 crore. This came on a lower revenue base of ₹455 crore against ₹828 crore in Q1FY26. Adjusted Ebitda loss, in fact, expanded from 36% to 43% of revenues. The stock is valued at 5.5x EV/Ebitda based on Bloomberg consensus estimates, which leaves room for re-rating, but that is contingent on tangible evidence of improving fundamentals.