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Ola Electric faces show-cause notice amid rising complaints and share price drop

Entrackr · 14d

Ola Electric has received a show-cause notice from the Central Consumer Protection Authority (CCPA) due to increased consumer complaints, citing alleged violations of consumer rights, misleading advertisements, and unfair practices. This news followed a 9% drop in Ola Electric’s share price, spurred by CEO Bhavish Aggarwal’s social media exchange with comedian Kunal Kamra over customer issues. The company plans to respond to the notice within the 15-day timeline set by CCPA. Additionally, Ola’s market share fell to 27% in September, down from 39% in July. According to Ola Electric’s disclosure, the Central Consumer Protection Authority (CCPA) issued a show-cause notice citing alleged violations of consumer rights, misleading advertising, and unfair trade practices. Ola Electric will respond to the CCPA within the 15-day timeline and has assured stakeholders that neither financials nor operations are affected by the notice. According to a recent report, Ola Electric received approximately 80,000 customer complaints per month. On Monday, Ola Electric’s Secretary and Compliance Officer resigned, citing personal reasons and commitments. The Bengaluru-based company’s shares are currently trading at Rs 89.01 (as of 10:28 AM), with a market capitalization of R s39,256 crore (approximately $4.6 billion). The company also experienced a decline in market share over the past three months, dropping to 27% in September from 32% in August, 39% in July, and 49% in June. For the June quarter (Q1 FY25), Ola Electric’s revenue from operations grew by only 2.8%, reaching Rs 1,644 crore, up from Rs 1,598 crore in Q4 FY24. However, the company managed to reduce its losses by 16.6%, bringing them down to Rs 347 crore in Q1 FY25. During FY24, it reported Rs 5,010 crore in revenue and a loss of Rs 1,584 crore.