Ola Electric Share Price Rises After Clarification On Consumer Complaints

Ola Electric Mobility Pvt.'s share price rose over 4% on Tuesday after the company clarified that nearly all of the complaints registered with India’s consumer protection authority are now resolved.

“The company has provided the requested information and clarifications in response to the show cause notice issued by Central Consumer Protection Authority,” Harish Abichandani, chief financial officer of Ola Electric, said in an exchange filing on Monday.

The EV-maker, founded by Bhavish Aggarwal, has faced declining monthly sales and a shrinking market share due to widespread after-sales service issues. Over 10,000 complaints about the quality of its scooters led to a show cause notice from the Central Consumer Protection Authority on Oct. 7.

This prompted an investigation by the Ministry of Heavy Industries, with the Automotive Research Association of India auditing the company. Ola has since launched initiatives to improve service, including expanding its network and training mechanics, while also working to regain sales and market share. 

Ola Electric's share price rose as much as 4.46% during the day to Rs 85.29 apiece on the NSE. It was trading 1.64% higher at Rs 82.99 apiece, compared to a 0.08% decline in the benchmark Nifty 50 as of 10:16 a.m. 

The stock has fallen 8.04% since it listed on Aug. 9 and total traded volume so far in the day stood at 1.2 times its 30-day average. The relative strength index was at 35.03.

Four of the six analysts tracking the electric scooter manufacturer have a 'buy' rating on the stock, and two suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 55.6%.