Ola Electric shares fall 5% as 1-month lock-in period for 18 crore shares end

Shares of Ola Electric Mobility fell as much as 5 per cent to an intraday low of Rs 104.10 as the one-month lock-in period for 18.18 crore shares ended on Monday, September 9. In a note, brokerage firm Nuvama said that the throughput shares, which were locked in, can now be traded. The end of the one-month lock-in period triggers apprehensions of selling pressure in the open market.

Nuvama Institutional Equities said 38 companies will see the lock-in period expire between September 5, 2024, and November 30, 2024, unleashing $21 billion worth of shares in the market. But it added that not all shares eligible to be sold will, in fact hit the market as a large chunk consists of promoter and group holdings, which normally do not sell.

Ola Electric, which more than doubled from its IPO price of Rs 76, entered a corrective phase following the post-listing surge. The stock has already fallen 30 per cent from its all-time high of Rs 157.53. Competition from TVS Motor, Bajaj Auto, Ather Energy, and Hero MotoCorp overshadowed the performance of the company in recent times. For instance, Ola Electric's August market share slipped to 32 per cent and TVS Motor and Bajaj Auto each grabbed 19 per cent market share to reflect the change in market dynamics.

Analysts still expect Ola Electric to show a bright future over the long run despite all the odds. Recently, HSBC initiated coverage on Ola Electric with a price target of Rs 140, citing that the company is well-positioned for strong prospects in India's fast-growing EV market. Although HSBC assumes a conservative view about the pace of EV penetration in the country, strong policy support by the government, cost efficiencies, and a promising battery venture make Ola a good investment with an appealing risk-reward profile, it said.

As of 11:13 am, Ola Electric shares traded 3.51 per cent lower at Rs 105.80, underperforming the Sensex which staged a recovery of nearly 1 per cent from day’s lowest level.