EV stock under Rs 50 hit 10% upper circuit after promoter sold 9.65 crore shares to repay a promoter-level loan of Rs 260 crore

The Indian electric vehicle (EV) market witnessed a significant movement on Friday as shares of Ola Electric Mobility Limited hit a 10 per cent upper circuit. The stock surged to Rs 34.40 per share, rising sharply from its previous closing of Rs 31.28. This bullish momentum was accompanied by a massive spike in trading activity, with market volumes on the BSE jumping more than fourfold compared to recent averages.

Promoter Debt Clearance Drives Sentiment

The primary catalyst behind this sudden investor interest appears to be a strategic move by the company’s leadership. Ola Electric confirmed that its promoter has successfully completed a one-time, limited monetization of a small portion of his personal shareholding. The transaction involved the sale of 9,64,60,454 shares.

Crucially, this sale was executed specifically to fully repay a promoter-level loan amounting to approximately Rs 260 crore. By settling this debt, the promoter has successfully released all 3.93 per centof the shares that were previously pledged. The elimination of promoter pledges is often viewed by the market as a positive development, as it removes the risk of forced liquidation during market volatility. Despite the sale, the promoter group maintains a dominant 34.6 per centstake in the company, ensuring no change in management control or long-term commitment to the brand’s vision.

A Deep Dive into Infrastructure and Innovation

As a leader in the Indian EV space, Ola Electric has built its reputation on a foundation of vertical integration. The company operates the "Ola Futurefactory," a state-of-the-art facility that handles the production of vehicles along with critical components such as motors, frames, and battery packs.

Beyond manufacturing, the company is doubling down on research and development. With R&D centers spanning India, the UK, and the US, Ola is positioning itself at the forefront of global EV innovation. In Tamil Nadu, the company is developing a comprehensive EV hub that includes the existing Futurefactory and an upcoming Gigafactory. This ecosystem is further supported by the Battery Innovation Centre in Bengaluru, which focuses on pioneering advancements in cell and battery technology to reduce dependency on imports.

Financial Snapshot and Market Standing

With a market capitalization exceeding Rs 15,000 crore, Ola Electric continues to be a heavyweight in the sector. Currently, the stock is trading at 3.46 times its book value. While the stock has recovered 11.72 per cent from its 52-week low of Rs 30.79, the company’s financial profile presents a mix of rapid scale and the growing pains of a capital-intensive industry.

In FY25, the company reported robust net sales of Rs 4,514 crore. However, it also posted a net loss of Rs 2,276 crore, reflecting the high costs associated with scaling production and building out its massive infrastructure. Investors have also noted a low interest coverage ratio, a metric that remains under watch as the company moves toward profitability.

Looking Ahead

Ola Electric’s direct-to-customer model, featuring over 750 stores, remains the largest company-owned automotive network in India. As the promoter-level debt is cleared and the Gigafactory inches closer to reality, the company remains steadfast in its goal to build a globally competitive, India-first clean energy ecosystem. Friday's market performance suggests that investors are responding favorably to the improved transparency and the strengthening of the company's financial structure at the leadership level.

Disclaimer: The article is for informational purposes only and not investment advice.