Ola Electric shares jump 10% as founder repays ₹260 crore loan, releases pledged shares
Ola Electric shares surged 10% after founder Bhavish Aggarwal sold over 9.6 crore personal shares for approximately ₹325 crore to repay a ₹260 crore loan. This move released all previously pledged shares, removing a major market overhang and boosting investor confidence. It signals reduced financial risk for the company while maintaining promoter control, despite the stock trading significantly below its IPO price.
Ola Electric shares experienced a significant boost, climbing 10% in early trade, following an announcement that founder Bhavish Aggarwal finalized the repayment of a ₹260 crore personal loan. This strategic move involved selling over 9.6 crore personal shares, generating approximately ₹325 crore, and effectively released all previously pledged shares, which had been a notable concern for investors.
The sale, which occurred across three trading sessions, was specifically orchestrated to clear the promoter-level debt. While the shares were sold at prices considerably below the initial IPO listing price of ₹76, the market reacted positively to the removal of this financial overhang. This action eliminated a key risk factor that had contributed to the stock's previous decline to record lows, reducing both governance and balance sheet risk for the company.
Despite the stock still trading well below it’s all-time high of ₹157.4, the complete repayment of the loan and release of pledged shares signals a commitment to consolidating the company's financial health. Aggarwal's promoter stake remains strong at 34.5%, reaffirming his control and long-term dedication to Ola Electric. Company officials highlighted that this was a planned transaction at the promoter's personal level, with no impact on the company's operations, governance, or strategic direction.
This development is seen as a crucial step in building investor confidence. The market's positive response indicates that addressing promoter-level leverage and reducing financial volatility is critical. Future recovery for Ola Electric will likely hinge on improving cost efficiency, driving demand, and achieving operational breakeven in the competitive electric vehicle market.
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