Ola Electric Mobility Bounces Back: A Sharp Reversal After a Six-Day Slump

Shares of Ola Electric Mobility have staged a strong comeback, rising over 6% on September 5 after a six-day losing streak. The stock had previously shed around 14%, driven by sharp profit booking that followed a bullish run after its market debut. As of 1:52 pm, Ola Electric shares were trading at Rs 118 on the NSE, signaling renewed investor interest supported by strong trading volumes.

Strong Trading Volumes Signal Renewed Interest

The sharp surge in Ola Electric’s stock price has been accompanied by robust trading activity. On September 5, the total traded volume on the NSE stood at 6.37 crore shares, marking the highest trading volume since August 26. This surge in volume underscores growing investor confidence and interest, following a significant price retracement.

Technical Analysis: Key Retracement Level

Technically, Ola Electric’s stock has retraced nearly 61.8% of its up-move from its listing day to August 20, when it hit an all-time high of Rs 157.40. This retracement level is often seen as a critical support zone in technical analysis, suggesting that the stock may have found a base from which it could potentially resume its upward momentum.

Major Milestones: PLI Certification for Mass-Market Scooters

Post its listing on August 9, Ola Electric has achieved a notable milestone with its mass-market scooters, S1 X 3 kWh and S1 X 4 kWh, receiving certification for compliance with the Production Linked Incentive (PLI) Scheme for the automobile and auto components sector. These scooters have met the stringent minimum localization criteria of 50%, as required by the Ministry of Heavy Industries.

With this achievement, Ola Electric stands out as the only two-wheeler and pure-play EV manufacturer to secure PLI certification for four of its products—S1 Air, S1 Pro, and S1 X (3 kWh and 4 kWh). The certifications were granted after thorough testing and component localization checks by The Automotive Research Association of India (ARAI).

PLI Scheme Incentives: A Financial Boost for Ola Electric

The PLI certification opens the door for Ola Electric to receive financial incentives for up to five consecutive financial years, starting from Fiscal 2024. The incentives range between 13% and 18% of the determined sales value (DSV) of the products. Furthermore, in March 2022, Ola Electric was awarded a 20GWh capacity under the PLI scheme for Advanced Chemistry Cell (ACC) Battery storage, allowing the company to benefit from additional incentives over a five-year period once its Gigafactory in Krishnagiri, Tamil Nadu, is commissioned.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.