Ola Electric Share Price Plummets 52% from High, Dips Below Issue Price - Read Now

Ola Electric Mobility is facing turbulent times as its share price dipped 3% on Tuesday, hitting a record low of ₹75.20 on the BSE. This drop marks a significant decline below its initial public offering (IPO) price of ₹76, occurring amidst heavy trading volumes. Since its market debut on August 9, 2024, the company's share price has more than halved, plummeting 52% from its record high of ₹157.53, reached just over a month ago on August 20, 2024.

Impact of Product Complaints on Brand Image

Analysts attribute this downturn to a recent surge in complaints regarding Ola Electric's products and after-sales service, which has negatively impacted the brand's image and may hinder its volume growth. The increasing competitive intensity within the electric vehicle (EV) two-wheeler (2W) segment is also a concern, as rivals threaten Ola Electric's market share.

As of 10:55 AM, Ola Electric shares were trading at ₹75.50, a decline of 2.8%, compared to a slight 0.6% drop in the BSE Sensex. The trading session has already seen approximately 17.3 million equity shares change hands on both the NSE and BSE.

Market Leadership and Future Prospects

Despite these challenges, Ola Electric remains a leader in the electric two-wheeler (e2W) market in India. The company has a technology-focused integrated business model, offers the highest incentives, and boasts a product portfolio that is ahead of the curve. India is the second-largest two-wheeler market globally, yet the penetration of electric two-wheelers in India remains lower than in countries like Germany and China.

However, projections indicate a shift, with e2W penetration expected to rise from approximately 5.4% of domestic 2W registrations in fiscal 2024 to between 41-56% by fiscal 2028.

Analysts' Opinions on Future Growth

Despite the current challenges, analysts remain optimistic about Ola Electric's growth prospects. They cite several factors driving this optimism: increasing EV adoption, aggressive new model launches across various price points, and a strong focus on research and development (R&D) and vertical integration, which could improve profitability in the medium term.

Analysts from Kotak Institutional Equities suggest that Ola Electric is well-positioned to capitalize on the expanding EV market, driven by sectoral tailwinds. They highlight the company's unique position as a pure-play EV original equipment manufacturer (OEM) without the risk of cannibalizing internal combustion engine (ICE) sales.

However, risks remain. The brokerage firm gives a 'Reduce' rating, with a target price of ₹80 per share, indicating that while the stock has growth potential, current challenges could impact its market share and overall performance.

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