Ola Electric shares fall 6% after show cause notice; drops 46% from peak

Shares of Ola Electric Mobility fell 6% on Tuesday after the company received a show-cause notice from the Central Consumer Protection Authority (CCPA). The notice alleges violations related to consumer rights, misleading advertisements, and unfair trade practices. The decline in the stock price marks a significant drop of 46% from its peak in August, when it reached Rs 157.53.
Ola Electric has said that the show-cause notice will not impact the company’s financial or operational activities for now. The company said that the CCPA’s notice does not include any penalties or financial fines. Ola Electric has been given 15 days to respond to the notice and will provide the required documents within that time frame.
In a statement, the company said, “The Central Consumer Protection Authority has provided a timeline of 15 days to the company to respond to the show-cause notice. The company will respond within the given timeframe with the supporting documents.”
Following the announcement of the show-cause notice, Ola Electric’s shares dropped by 6.18%, reaching a low of Rs 85.21. This brings the company’s stock down 46% from its high of Rs 157.53 on August 20, a significant decline in less than two months.
The company has been in the news recently due to a public exchange between its founder and CEO Bhavish Aggarwal and comedian Kunal Kamra. The dispute, shared on X (formerly Twitter), revolved around issues related to the service of Ola’s electric scooters.
The National Consumer Helpline, run by the Department of Consumer Affairs, reported 10,644 complaints related to Ola Electric between 1st September 2023 and 30th August 2024.
These complaints were primarily focused on service issues, with 3,389 cases involving delays in servicing Ola’s e-scooters. Additionally, 1,899 complaints were about delays in the delivery of new vehicles, and 1,459 complaints were filed over promises of services that were not fulfilled.
Ola Electric’s service-related challenges have attracted attention from consumers, and this show-cause notice from the CCPA adds further pressure on the company.