Ola Electric’s stock is taking a beating, slipping below ₹50 for the first time. On Monday, shares hit an all-time low of ₹46.94 on the Bombay Stock Exchange (BSE), with a 7% drop in early trade.

This steep fall came right after news broke that an insolvency petition had been filed against its subsidiary, Ola Electric Technologies, by Rosmerta Digital Services. The creditor accused Ola of defaulting on payments and approached the National Company Law Tribunal (NCLT) in Bengaluru to initiate a Corporate Insolvency Resolution Process (CIRP).

Financial strain or just a legal battle?

Ola Electric quickly responded, saying it plans to challenge the claims legally. The company assured investors that it's taking the necessary steps to defend itself. However, the market clearly isn’t convinced, as the stock continues its downward slide.

For an EV company that has been aggressively expanding, any financial setback raises concerns. Investors have been watching Ola Electric closely, given its ambitious plans to dominate the Indian EV market. But with this new legal trouble, confidence has taken a hit.

Technical indicators show further weakness

From a technical perspective, things don’t look great for Ola Electric’s stock. It’s trading below key moving averages, including the 5-day, 10-day, 20-day, 50-day, and even the 100-day simple moving averages (SMA). Its 14-day relative strength index (RSI) is at 41.57, which indicates weakness.

The stock has already lost over 45% in 2024 alone. In the past six months, it has dropped 60%, with nearly a 23% decline in just the last month.

What this means for India’s EV industry

Ola Electric is one of the most high-profile players in India’s EV sector. Its success—or struggles—impact the larger narrative of EV adoption in the country. If Ola faces serious financial hurdles, it could slow down its production and expansion plans, affecting India’s EV growth story.

This also raises questions about how Indian EV startups are managing their financials. Ola Electric has been pushing into battery manufacturing, building its Futurefactory, and competing with established players—all of which require huge capital. If cash flow becomes a concern, will it impact its ability to deliver on its promises?

For now, all eyes are on how Ola Electric navigates this situation. If it manages to resolve the insolvency petition smoothly, the stock may recover. But if more financial troubles emerge, the impact could be long-term—not just for Ola, but for the perception of EV startups in India.