Ola Electric’s shares declined 3.5% on Tuesday, slipping below the IPO price of Rs 76 for the first time since its listing on August 9. The stock touched an intraday low of Rs 74.84 on the NSE before closing at Rs 76.64.
Ola Electric Mobility had a lukewarm market debut, listing at the upper band of the issue price at Rs 76. The stock, however, quickly rebounded, hitting a 20% upper circuit in following days to reach a peak of Rs 157.40 on August 20, fuelled by renewed investor interest and hopes of widespread EV adoption.
The stock price, however, began to slide amid an intense sell-off, driven by a series of negative developments, including mounting service-related issues, regulatory show-cause notices, and a decline in monthly sales and market share. The company’s market capitalisation halved to Rs 33,804.60 as of Tuesday, from a peak of over Rs 69,000 crore, in two months.
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Global broking firm HSBC, which was the first to initiate coverage on Ola Electric, has cut the stock’s target price to Rs 110 from its earlier recommendation of Rs 140 citing slower-than-expected electric two-wheeler penetration and the ongoing service issues.
“Penetration, which seemed to be picking up till September, has stagnated again and continues to hover around 6%. A large share of OLA’s growth forecasts is contingent on the continued rise in penetration,” it added.
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