Ola Electric shares hit 6-month low
What's the story
Ola Electric's shares plummeted over 7% to a six-month low of ₹29.53 on the NSE today. The fall follows a downgrade by global investment bank Goldman Sachs, which changed its recommendation from 'Neutral' to 'Sell.' The bank has also reduced its target price for the stock from ₹39.28 per share to ₹23, indicating a potential downside of 24% from current levels.
Market analysis
Ola shares fall nearly 15% in a week
Ola Electric's shares have witnessed a sharp decline of nearly 15.42% in the past week and 28.06% in the last month.
Goldman Sachs has cited several reasons for its downgrade, including high capital costs, operating losses, and a challenging path to free cash flow.
Financial forecast
Brokerage revises revenue estimates for FY27 to FY29
Goldman Sachs has revised Ola Electric's revenue estimates for FY27 to FY29 by up to 10%.
The revision reflects a more competitive market share environment compared with its peers in the two-wheeler space.
The brokerage also flagged potential operational challenges in the battery-cell business after the recent exit of its business head.
Fundraising efforts
Ola Electric launches ₹1,000 crore rights issue
Earlier this month, Ola Electric announced a ₹1,000-crore rights issue at ₹27 per equity share, a 26% discount to the current market value.
The company will offer 37.03 crore partly paid-up shares under the offer.
The rights issue opened on Thursday and will close on October 30.
Shareholders can sell or transfer their rights entitlement in the market until October 26.