Ola Electric’s Share Price Plunges Over 40% From Its Peak: Is a Bounce Back Possible?

Ola’s Share Price Decline

As of October 16, 2024, the share price of Ola Electric Mobility is trading down by 0.46%, falling below Rs 90. This marks a significant decline of about 44% from its peak of Rs 157.40, which was registered on August 20, 2024. Ola had a strong start after its IPO, but recent developments have weighed heavily on the stock.

Initial Surge Post-IPO

Ola Electric was listed on August 9, 2024, at an issue price of Rs 76 per share. Just days after its debut, by August 23, the share price had surged to Rs 126.21, reflecting an impressive 66% gain since listing. At its peak performance, the company reached a market capitalization of Rs 55,669 crore. 

Challenges Leading to Decline

Despite its strong start, the share price of Ola has been under pressure in recent weeks. This decline has been largely attributed to reports that the Consumer Protection Authority (CCPA) issued a notice to Ola Electric after receiving over 10,000 complaints regarding the quality and after-sales service of its electric two-wheelers. The unresolved issues have contributed to negative sentiment among investors.

Additionally, the company’s share price took a further hit when the Automotive Research Association of India (ARAI), under the Ministry of Heavy Industries, began scrutinizing Ola’s pricing practices. This has raised concerns about the company’s regulatory compliance, further dragging down its share price.

Technical Analysis of Ola 

Ola’s share price is currently trading below its 20-day moving average (DMA), indicating bearish momentum. The 20-DMA is in a downward trajectory, signalling short-term weakness. Additionally, the 14-period Relative Strength Index (RSI) on the daily time frame is below the level of 40, as well as below its 9-day average, suggesting continued selling pressure.

October Performance So Far

In October 2024, the share price of Ola declined by 10.67%, continuing its broader downtrend. The stock has extended its fall by 15.5% over the past couple of weeks, reflecting the ongoing concerns surrounding the company.

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.