The end of Ola Electric’s one-month shareholder lock-in period has led to increased market focus and a noticeable decline in its stock price. While the expiration of the lock-in period allows for increased trading eligibility, it does not guarantee that all eligible shares will be sold. The company’s stock has faced significant volatility, partly due to competitive pressures and market dynamics. Looking ahead, despite current challenges, optimistic projections regarding future EV manufacturing costs provide a potential positive outlook for Ola Electric.
Shares of Ola Electric Mobility Ltd. experienced a decline of nearly 4% on Monday, coinciding with the end of its one-month shareholder lock-in period. This day marks exactly one month since Ola Electric's debut on the stock market, which occurred on August 9. The lock-in period's conclusion has drawn significant attention to the stock's performance.
On Monday, the lock-in period for Ola Electric's shareholders ended, allowing approximately 18.18 crore shares, or 4% of the company’s total outstanding equity, to become eligible for trading. However, it is important to clarify that the expiration of this lock-in period does not automatically imply that all these shares will be sold in the market. Rather, it means these shares are now eligible for trading but may not necessarily be sold immediately.
Since its initial public offering (IPO) at a price of ₹76, Ola Electric’s stock had initially doubled in value. However, the stock is now in a corrective phase, having already declined by 30% from its peak of ₹157.4. This downward trend highlights the volatility often associated with newly listed stocks and the market’s reaction to various factors influencing investor sentiment.
The company has faced challenges in maintaining its market share amidst increasing competition. Ola Electric has recently lost market share to competitors such as TVS Motor, Bajaj Auto, Ather Energy, and Hero MotoCorp. As of August, Ola Electric’s market share stood at 32%, while both TVS and Bajaj Auto captured 19% each. The upcoming weeks may present further challenges as these competitors ramp up their sales and production efforts.
According to a report by Jefferies, Ola Electric's declining market share can be attributed to heightened competition from established players in the electric vehicle (EV) sector. This competitive pressure is expected to intensify as these rivals enhance their market presence and expand their product offerings.
Despite the current challenges, HSBC has provided a more optimistic outlook for Ola Electric. The financial institution anticipates a positive risk-reward scenario for the company, based on projections that EV manufacturing costs will significantly decrease by the financial year 2027-2028. In contrast, the costs of internal combustion engine (ICE) scooters are expected to rise due to stricter emission standards. This forecast could position Ola Electric advantageously in the long term as the market dynamics evolve.
Current Stock Status
As of the latest trading data, Ola Electric's shares are down by 3.1%, trading at ₹106.25. This decline reflects ongoing market uncertainties and investor concerns about the company's performance and competitive positioning. The stock's movement will likely continue to be influenced by both internal developments and external market conditions.