MUMBAI: Shares of Ola Electric Mobility fell over 7% to hit a record low on Monday after the company reported that one of its units faced an insolvency petition.
Shares of the electric two-wheeler maker ended at Rs 46.9, down 7.2% over its previous close. At the last close, the company was valued at Rs 20,687 crore.
Rosmerta Digital Services, a vehicle registration service provider and a creditor of Ola Electric Technologies, filed a petition against the Ola unit alleging default in payments.
The petition has been presented to the Bengaluru Bench of the National Company Law Tribunal, claiming that there has been a default in payments owed for services provided by the operational creditor and requesting the commencement of the corporate insolvency resolution process (CIRP) against Ola Electric Technologies.
Ola did not specify the size of the default.
Ola Electric Mobility stated that it has sought proper legal counsel and will firmly contest the allegations raised. Ola added that it will "take all necessary and appropriate measures to safeguard its interests and challenge the claims in the aforementioned case."
Ola Electric Mobility had earlier indicated that it was in the process of renegotiating its agreements with its partners, including Rosmerta Digital Services and Shimnit India—to lower expenses and improve the efficiency of the registration process.
From its initial public offering (IPO) price of Rs 76, the stock is now down 38% and from its all-time high of 157, it has lost more than two-thirds of its value. The company has been facing challenges, including declining sales, accumulating losses and increased regulatory scrutiny.