Rosmerta Digital Files Insolvency Plea Against Ola Electric: Key Details
Ola Electric Shares Drop Below ₹50 for the First Time, Hit Record Low of ₹46.94 on BSE
Rosmerta Digital Files Insolvency Plea Against Ola Electric: Key Details
Mumbai: Ola Electric shares suffered a sharp blow on Monday, falling almost 7% in early trade and dipping below ₹50 for the first time. The stock plummeted to a record low of ₹46.94 on the Bombay Stock Exchange (BSE) before paring some losses to trade at ₹47.25, down 6.51% at 10:54 AM.
The sudden fall came after Ola Electric made the revelation that an insolvency petition has been filed against its subsidiary, Ola Electric Technologies, by Rosmerta Digital Services, which is an operational creditor.
Insolvency Plea Filed by Rosmerta Digital Services
Rosmerta Digital Services filed the insolvency petition with the National Company Law Tribunal (NCLT) in Bengaluru, claiming that Ola Electric had defaulted in payments for services provided. The firm has requested the initiation of the Corporate Insolvency Resolution Process (CIRP) against Ola Electric Technologies.
Who is Rosmerta Digital Services?
Rosmerta Digital Services Ltd is a subsidiary of Rosmerta Technologies Ltd (RTL) and operates in digitally empowered services for the automotive industry. The company specializes in the online distribution of automobile components and accessories and is among the leading players in the delivery of High Security Registration Plates (HSRP) to dealerships and customers’ homes.
Rosmerta Digital launched on the BSE SME platform in November 2023. On its website, the firm defines itself as a “premier partner for cutting-edge Last Mile Service Delivery solutions”, providing fast and secure delivery of HSRP plates.
Ola Electric’s Response
Ola Electric validated the insolvency petition in a statement:
“We hereby inform you that a petition has been presented under Section 9 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) by M/s. Rosmerta Digital Services Limited, an Operational Creditor of Ola Electric Technologies Private Limited, a subsidiary company of Ola Electric Mobility Limited (‘the Company’).
The company clarified that the petition had been filed before the NCLT Bengaluru Bench, alleging payment defaults for services provided by Rosmerta Digital Services. However, Ola Electric dismissed the allegations, stating that it had sought legal advice and intends to challenge the claims.
“We will take all necessary steps to defend our position,” the company added, seeking to reassure investors.
Impact on Investors and Stock Performance
Market analysts anticipate Ola Electric’s stock to continue facing pressure because of the insolvency appeal and doubts regarding the financial well-being of the firm.
Vinit Bolinjkar, Ventura Securities’ Head of Research, pointed out that Ola Electric needs to increase its sales volume in order to restore investors’ trust.
“If Ola Electric is not able to boost sales at this critical point—when the EV sector is gaining momentum—then there is a critical fault in the acceptability of its products. Even after launching cars in different segments, volume stability continues to be an issue, which will keep prodding negative sentiment,” Bolinjkar said.
Technical analysts too have pointed out weakness in the stock’s performance.
Vaishali Parekh, Vice-President (Technical Research) of Prabhudas Lilladher, commented, “The stock is in the downtrend and is in the oversold region on the daily charts. Wait for trend reversal.”
Ola Electric’s share price is falling below the significant moving averages like the 5-day, 10-day, 20-day, 50-day, and 100-day simple moving averages (SMAs). Its 14-day Relative Strength Index (RSI) was also at 41.57, showing weakness in momentum.
What’s Next?
While Ola Electric battles the insolvency plea, its investors will keenly observe its balance sheet strength, legal approach, and upcoming sales performance. The pressures on its stock price and the way the market reacts to NCLT proceedings will decide the company’s immediate outlook.
