Bhavish Aggarwal Increases Pledge as Ola Electric's Share Price Drops

Ola Electric’s CEO, Bhavish Aggarwal, has increased his pledge amidst a significant drop in the company's share price. According to a Bloomberg report, Aggarwal made a ₹20 crore cash payment to top up collateral for borrowings against his Ola Electric shares. This move comes after the company’s share price slid sharply from its high, driven by disappointing sales figures and mounting concerns over regulatory issues

Bhavish Aggarwal Increases Pledge

Ola Electric Mobility Ltd.'s founder and CEO, Bhavish Aggarwal, has made a substantial pledge of ₹20 crore to secure borrowings against his shares. This move comes as the company faces a slump in share price and disappointing sales figures, further compounded by growing concerns surrounding regulatory issues. This payment highlights the current financial pressures on the company, which has seen a significant decline in its stock performance.

Declining Ola Electric’s Share Price and Market Share

Ola Electric’s share price has taken a noticeable hit since the company’s listing in August. The company’s share price, which initially started at ₹76, is now trading well below ₹50. This decline is partly attributed to a reduction in sales, with Ola Electric's market share falling drastically from over 48% last year to just 18% in May. These figures indicate a sharp decline in the company’s dominance in the electric scooter market.

Read More: TVS Motor and Bajaj Auto Lead Electric 2W Sales in May; Ola Electric Slips to Third with 51% Drop. 

Aggarwal's Additional Investment

In light of this drop in share price, Bhavish Aggarwal voluntarily injected ₹20 crore in cash to increase the collateral for the borrowings against his shares. This pledge is a precautionary measure as his generative AI venture, Krutrim Data Centre Pvt., has raised ₹250 crore by pledging Ola Electric equity. Despite the slump in shares, no margin calls were triggered, and the value of the stock collateral remains more than double the amount borrowed.

The Role of Investors and Stake Changes

Ola Electric’s financial troubles have also led to some significant shifts in its investor base. SoftBank Group Corp., a prominent backer, has seen its stake reduced, along with Hyundai Motor Co. and Kia Corp., which also scaled back their investments. This reduction in support highlights the growing concern over Ola Electric's financial stability and its future prospects in the market.

Conclusion 

As investors continue to watch the developments closely, the future of Ola Electric remains uncertain. With regulatory and governance issues weighing on the company, combined with its shrinking market share, the company faces an uphill battle to regain investor confidence and market dominance.

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