Ola Electric Shares Decline 43% Post-Listing as Market Share Erodes

Ola Electric Mobility Ltd. saw its shares drop by as much as 8% on October 7, 2024, marking the third consecutive day of losses for the stock. The decline is significant, with shares now down 43% from their post-listing high of ₹157.4, reached shortly after the company went public at an issue price of ₹76 in August 2024.

The company's market share has faced a steep decline, dropping from 52% in April to just 27% in September, as per VAHAN data. This decline coincides with intensified competition from legacy auto manufacturers like Bajaj Auto and TVS Motor, which have increased their market share from around 12% to approximately 20% in the same timeframe.

In a bid to regain market traction, Ola Electric recently launched a promotional "BOSS sale," offering festive discounts of up to ₹40,000 and introducing its S1X scooter range starting at ₹49,999. However, these efforts may not be enough to counteract the ongoing negative sentiment surrounding the company's service quality.

Ola Electric and its founder, Bhavish Aggarwal, have been embroiled in a social media controversy regarding customer service, which began with a tweet from stand-up comedian Kunal Kamra. This public exchange has led to heightened scrutiny from both customers and investors, with many expressing dissatisfaction with the company's service.

Brokerage firm HSBC has highlighted that addressing service quality is crucial for Ola Electric, especially with the impending launch of its motorcycles. Despite these challenges, HSBC maintains a "buy" recommendation for Ola Electric with a price target of ₹140.

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Currently, shares of Ola Electric are trading at ₹90.67, approaching their initial public offering price of ₹76. As the company prepares for future listings, it will need to effectively navigate market challenges to regain investor confidence.

[Disclaimer: This content is for informational purposes only and should not be construed as financial or investment advice. Readers are encouraged to conduct their own research before making investment decisions.]