Ola Electric shares in focus as board to finalise Rs 1,000 crore Rights Issue on October 5

Ola Electric Mobility Ltd's board will meet on Monday to consider and decide various terms of the company's proposed rights issue of partly paid-up equity shares worth up to Rs 1,000 crore, according to a regulatory filing. Shares will remain in focus.

The meeting is scheduled for October 5, or after the company receives in-principle approval from the stock exchanges where its securities are listed or other regulatory authorities, whichever is later.

The board will consider key details of the proposed rights issue, including the issue price, payment mechanism, rights entitlement ratio, record date and timing of the issue, the company said.

In a separate statement, Ola Electric said promoter Bhavish Aggarwal has pledged 4.32 per cent stake in the company to fund his participation in the proposed rights issue.

The company said the pledge has been created solely to finance Aggarwal's subscription to the rights issue, as disclosed in the Draft Letter of Offer filed on September 28.

"There are no other pledges to his securities currently; no shares are being sold," the company said.

Aggarwal will participate in the rights issue alongside other shareholders and subscribe on the same terms, according to the statement.

A rights issue allows a company to raise capital by offering new shares to existing shareholders, generally in proportion to their existing holdings. The final issue price, entitlement ratio and other terms will be determined by the board.

Ola Electric's proposed fundraise comes as the company continues to focus on its electric two-wheeler business and expansion.

Global brokerage HSBC maintained its 'Reduce' rating and a target price of Rs 24, implying a downside of around 37 per cent from its previous close, despite noting progress in the company's battery manufacturing operations.

HSBC's assessment followed a visit to Ola Electric's Giga Factory, where the brokerage observed the company's efforts to ramp up battery production and localisation. While the factory's automation and vertical integration could support better operating margins, HSBC flagged brand recovery and management's ability to deliver on commitments as key monitorables.

HSBC highlighted Ola Electric's push to expand battery manufacturing and increase localisation during its factory visit. The company expects battery manufacturing yields to improve to around 90 per cent from the current 70 per cent over the next six to nine months.

Higher yields would mean a larger proportion of manufactured battery cells meet quality standards, potentially reducing wastage and improving production efficiency.

The brokerage also noted that Ola Electric's upcoming factory reflects greater automation and vertical integration. These developments support management's expectations of improved operating margins as the company scales up its manufacturing operations.

Despite the operational progress, HSBC maintained its 'Reduce' rating, identifying two key concerns: rebuilding the company's brand image and management's ability to deliver on its commitments.

The brokerage's assessment highlights the distinction between improvements in manufacturing infrastructure and the company's broader business recovery. While better battery yields and increased automation could improve production economics, HSBC continues to flag execution and brand-related risks.

Ola Electric earlier launched of its first cohort of network partner stores, with dealer-operated outlets in the states of Rajasthan, Tamil Nadu, Maharashtra, Bihar,

Telangana, Uttar Pradesh & Madhya Pradesh going live. The stores deepen the company's presence in key regional markets and will serve local demand for Ola scooters and motorcycles in their local markets.

The inauguration marks a structural shift in the company's retail strategy. On August 6, Ola Electric opened its sales and service network to dealer partners for the first time, five years after launching its first scooter through a fully company-owned model. Within a month of that announcement today, the first partner stores are open and serving customers, a testament to strong dealer interest in its product portfolio. The transition to a partner-led distribution network enables stronger local market penetration, improved accessibility, and faster customer response across geographies.