Ola Electric To Infuse INR 199 Cr In Battery Manufacturing Arm

EV maker Ola Electric’s board has approved an infusion of INR 199 Cr in its battery manufacturing subsidiary Ola Cell Technologies (OCT).

In an exchange filing, the EV manufacturer said that it will acquire 19.9 Cr compulsory convertible preference shares (CCPS) in its wholly-owned subsidiary at INR 10 apiece. The listed company expects the all-cash deal to be completed by April 30, 2025.

The fresh proceeds will be used by Ola Cell Technologies to “support its business requirements”.

In addition, Ola Electric’s board also gave its nod to convert outstanding payables to the tune of INR 61.2 Cr owed by OCT into 6.12 Cr CCPS.

“The conversion of the outstanding payables into compulsorily convertible preference shares by OCT to the company is part of its overall strategic decision,” the filing added.

Incorporated in 2022, OCT manufactures, assembles, exports and sells batteries and cells.

The proposed INR 200 Cr infusion in OCT comes nearly a month after Ola Electric received a notice from the heavy industries ministry (MHI) for failure to meet its targets under the INR 18,100 Cr production-linked-incentive (PLI) scheme for advanced chemistry cells (ACCs).

This also coincides with Ola Electric recently saying that it plans to commence commercial production of lithium-ion cells in Q1 FY26.

Ola Electric’s Other Decisions Pertaining To Subsidiaries

The company’s board also greenlit a proposal to convert outstanding payables worth INR 250 Cr of wholly owned subsidiary Ola Electric Technologies (OET) into 25 Cr preference shares of INR 10 each.

Meanwhile, the board also approved a plan to convert outstanding loan extended to OET and accrued interest to the tune of INR 70.55 Cr into 7.05 Cr CCPS.

Part of EV maker’s “strategic decisions”, both transactions are expected to close by April 30.

Set up in 2021, OET is engaged in the business of providing services across the EV value chain as well as manufacture and supply of electric vehicles.

The Bhavish Aggarwal-led company also said that it will pump INR 3.5 Cr in its charging infrastructure subsidiary Ola Electric Charging (OEC) Pvt Ltd to acquire 35 Lakh CCPS at INR 10 each.

Expected to close by September 30, the infusion will help OEC “support its business requirements”.

Alongside, the board also approved a proposal for the conversion of outstanding payables to the tune of INR 2.6 Cr of OEC into 26 Lakh preference shares.

Incorporated in 2021, OEC is in the business of manufacturing, installing, and commissioning of charging stations for EVs.

Ola Electric’s Many Troubles

Lately, the original equipment manufacturer (OEM) has been dousing fires on multiple fronts, including regulatory scrutiny, mounting losses, dwindling stock price, among others.

Ola Electric’s net loss surged 50% year-on-year (YoY) to INR 564 Cr in Q3 FY25, while revenue from operations declined 19% YoY to INR 1,045 Cr during the quarter under review. Meanwhile, the company’s shares have slumped over 41% in the past three months.

Largely to blame for this spiral are the raids by transport departments of multiple states, including Madhya Pradesh and Maharashtra, at Ola Electric’s showrooms. This saw authorities impounding 50 scooters in the two states amid a report that more than 95% of the company’s 3,400 showrooms were operating without necessary trade certificates.

In addition, MHI and over alleged discrepancies between its reported sales figures and actual vehicle registrations in February.

While the company claims to have sold 25,000 scooters last month, the Vahan portal only showed 8,600 new registrations during the same period. The company attributed the difference to the ongoing negotiations with its vendors (or registration agencies).

As if this was not enough, one of OET’s vendors, Rosmerta Digital Services, filed an insolvency petition against the company over alleged unpaid dues. However, the registration agency withdrew the plea last week.

Shares of Ola Electric closed Friday’s (March 28) trading session 3.81% lower at INR 52.97 on the BSE.

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