Shares of Ola Electric Mobility Ltd declined by 5% on Wednesday after the company received an administrative warning from market regulator SEBI
Shares of Ola Electric Mobility Ltd declined by 5% on Wednesday after the company received an administrative warning from market regulator SEBI for breaching regulations related to the dissemination of information. SEBI highlighted that Ola Electric’s promoter and Chairman-cum-Managing Director, Bhavish Aggarwal, made a significant announcement on X (formerly Twitter) on December 2, several hours before the company informed the stock exchanges.
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According to Regulation 30(6)(ii) of the LODR, a listed entity is required to disclose material events or information to the stock exchanges as soon as reasonably possible, and no later than twelve hours from the occurrence of the event or information.
Ola Electric’s shares dropped 4.8% to a low of Rs 75.36 on BSE, marking an 18% decline over the past month.
SEBI’s letter stated, “While the information was disclosed to stock exchanges at 1:36 PM (BSE) and 1:41 PM (NSE) on December 2, it was first announced on X (formerly Twitter) at 9:58 AM by Bhavish Aggarwal, your promoter and Chairman-cum-Managing Director.”
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SEBI also referred to Regulation 4(1)(d) of the LODR, which mandates that listed entities provide timely and adequate information to both the stock exchanges and investors. The regulator found that Ola Electric failed to meet this requirement by disclosing the information on social media first instead of through the official channels.
The regulator emphasized that such actions fail to consider the interests of all stakeholders, and the company is advised to improve its compliance standards moving forward to avoid further violations.
In response, SEBI warned the company to adhere to its obligations or face potential enforcement actions under the SEBI Act, 1992.
Karnataka High Court Grants Extension for Response to CCPA:
Ola Electric is also dealing with a Show Cause Notice from the Central Consumer Protection Authority (CCPA). The Karnataka High Court has granted a six-week extension for the company to submit its response to the CCPA’s request for additional documents. The court affirmed that the investigating officer’s request for further information was within their power, and Ola Electric is obligated to provide the requested documents.
Ola Electric had previously resolved 99.1% of the complaints it received from the CCPA.
Regarding the stock, Trendlyne data indicates an average target price of Rs 97, representing an upside potential of 22% from its current market value. Out of seven analysts, the consensus recommendation remains ‘Buy’.
On Tuesday, Ola Electric shares closed at Rs 79.1, up 1.54%, while the benchmark Sensex gained 0.3%. The stock has fallen 17% in the last month and 13% over the past three months, with a market capitalization of Rs 34,916 crore.
