Ola Electric Faces Scrutiny Over Sales- Registration Mismatch

Ola Electric is facing scrutiny over a gap between its reported sales and actual vehicle registrations. The company announced it had sold 25,000 electric scooters in February, but the government’s Vahan portal, which tracks vehicle registrations, recorded only 8,651 registrations by the end of the month. 

As of March 17, the number stood at 8,230, leaving a difference of over 16,000 unregistered scooters.

Regulatory Requirements and Potential Issues

Under the Motor Vehicles Act, vehicles must be registered with the state transport department within seven days of sale. The Central Motor Vehicles Rules, 1989, prohibit the delivery of vehicles without registration, either temporary or permanent. If Ola Electric has not followed these guidelines, it could face legal consequences, and customers operating unregistered vehicles may also be at risk.

Concerns Over Financial Reporting

Ola Electric’s draft red herring prospectus (DRHP), filed before its IPO, states that the company only recognizes revenue once a scooter is delivered and registered on the same day. However, industry sources suggest that the company may have reported bookings as sales, potentially influencing market perception.

SEBI and Investor Implications

The gap between sales and registrations has raised concerns about transparency. The Securities and Exchange Board of India (SEBI) and stock exchanges may require a clarification from Ola Electric. Failure to explain the discrepancy could result in penalties or further regulatory action.

Conclusion 

Ola Electric recently ended its contract with registration service providers Rosmerta Digital and Shimnit India and has taken registration processes in-house. Rosmerta Digital Services and Rosmerta Safety Systems have filed an insolvency petition against Ola Electric Technologies for ₹24.5 crore in unpaid dues.

Following reports of the sales-registration mismatch, Ola Electric’s stock dropped 7.18% on the BSE, closing at ₹46.91 yesterday. The company has yet to issue an official response.

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