Ola Electric shares drop 5% after SEBI warning

Ola Electric shares tanked 5% on the NSE after capital market regulator SEBI issued warning over non-compliance with disclosure norms. The regulator issued an administrative warning letter to Ola Electric Mobility over disclosure violations on January 7, the company informed the exchanges.

The company’s shares were trading at ₹75.45 on the NSE, down 4.69% from the previous close of ₹79.16. Earlier today, the shares touched a one-month low of ₹75.16.

The warning was related to CEO Bhavish Aggarwal's announcement in December about the company’s plans to quadruple its stores from 800 to 4,000. In his post on X, Bhavish stated that the expansion would be completed December 20, but the rollout occurred on December 25.The warning may not have had any material impact on the company’s financials, but it has indeed weighed on Ola’s performance on the stock market today.

The January 7 letter warned OLA for violating four clauses of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The violations pertain to ensuring equal, timely, and cost-efficient access to relevant information for all investors. SEBI said that the EV manufacturer announced its expansion plans on X (formerly Twitter), 4 hours before informing the exchanges. The regulator flagged the premature dissemination of information on social media, instead of first informing stock exchanges, as a failure to meet disclosure obligations.

The regulator has taken serious note of this violation and warned the company to improve compliance standards to prevent future lapses. It also cautioned that further violations may result in enforcement action under the SEBI Act, 1992, and related regulations.

With a market capitalisation of ₹33,359.11 crore, Ola Electric Mobility shares have declined by almost 52% from its peak of ₹157.40 in August last year.

Ola reported a consolidated net loss of ₹495 crore for the second quarter of this fiscal in November. While the loss narrowed from ₹524 crore in the same quarter last year, it widened from ₹347 crore in the June 2024 quarter. The company’s consolidated revenue from operations rose 39% year-on-year to ₹1,214 crore in Q2 FY25, compared to ₹873 crore in the corresponding period last year.