New Delhi: Credit rating agency ICRA Ltd lowered debts from Ola Electric Technologies Ltd, which is a major subsidiary of listed Ola Electric Mobility Ltd., where the company's electric scooter sales dropped sharply in April, raising concerns about ongoing cash burn and delayed profitability.
The downgrade is due to India's largest two-wheeler manufacturer working to defend market share in rising competition, operational scrutiny and regulatory reviews. ICRA marks the company's slower scale, the slender amount of cash burning period, and the possibility of additional fundraising over the next 12-24 months.
Read this | Ola Electric's sales crash in the booming two-wheeler market
Rapidly triggered sharp attention
Ola Electric's vehicle registrations were nearly halved to 19,709 in April 2025, compared with more than 34,000 a year ago. Gurgaon-based rating agency lowers four worthwhile credit lines ₹18.87 million from “A (negative)” to “BBB+ (negative)”.
“The downgrade of ratings and the continuation of negative perceptions is due to the slower proportion of OET (OLA motor) electric two-wheeler (E2W) sales, which led to a cash burn period that exceeded expectations and increased the company’s profitability.”
The agency estimates that Aola Electric's full-year losses for fiscal 25 may be expanded to ₹1,900–20 million, from ₹It was 16 billion in fiscal year 24. In the December 2024 quarter alone, the company posted a net loss ₹5.64 million, compared to ₹3.76 million a year ago.
Founded by Bhavish Aggarwal in 2017, Ola Electric began launching scooters in December 2021. Supported by investors such as Softbank, Edelweiss and Tiger Global, the company sells and registers vehicles primarily through Ola Electric Technologies, mainly through Ola Electric Technologies, the most important subsidiary of its ten group entities.
Despite early success, OLA has encountered headwinds in recent months. ICRA stressed that fierce competition from competitors such as Bajaj Auto, TVS Motor and Ather Energy will require higher investments and may further accumulate their credit.
“The company’s operating margin remains negative, with an operating margin (OPM) of -26.7% at -26.7% compared to -22.7% in fiscal 22.24. The company’s ability to reduce operating losses and ultimate profit will remain key to monitoring.”
Ola Electric sold 344,009 units in FY25, an increase from 329,947 units the previous year.
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Ola Electric's share price has fallen 44% since the beginning of the year, while Nifty Auto's share price has fallen 4%.
Regulate calories and customer complaints
In February, the company terminated the contract with two registration agencies, destroying the scooter registration. Although Ola claims to have sold 25,000 cars that month, only about 8,500 were registered, which has caused review from road transport and highways, Heavy Industry Base and the Securities and Exchange Commission of India.
Read this | At Ola Electric Showdown at Registration Agency
To clarify for the road department, the company explained that the February sales summary included about 1,400 orders confirming its yet-to-be-delivered e-bike sports car X. Delivery plans for the model will begin in May.
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Meanwhile, several customers have visited social media to complain about delayed delivery after full payment. one Mint Inspections of seven stores in Delhi, Mumbai and Bangalore found that delivery schedules have been extended to 20-45 days due to registration delays.
