Ola Electric founder clears ₹260 crore debt via stake sale; stock hits record low

Ola Electric founder Bhavish Aggarwal has fully repaid all personal loans linked to his shareholding in the company, releasing promoter pledges worth ₹260 crore in a move aimed at improving corporate governance sentiment.

According to exchange filings, Aggarwal executed a bulk deal on Tuesday, selling approximately 2.62 crore shares (0.6% equity) at an average price of ₹34.99 per share. The sale raised roughly ₹92 crore, which was combined with other personal funds to settle the outstanding debt.

The transaction releases 3.93% of the company’s equity that had been pledged as collateral. Consequently, the promoter group’s stake in Ola Electric has marginally decreased from 36.78% to just over 34%, but Aggarwal is now entirely debt-free at the promoter level.

Funding the AI pivot

Company sources clarified that the original loan was taken to seed fund Krutrim, Aggarwal’s artificial intelligence venture. Krutrim has since transitioned from a research startup into a revenue-generating cloud infrastructure provider and is reportedly cash-flow positive, eliminating the need for further promoter leverage.

“This transaction was executed entirely at the personal level and has no impact on Ola Electric’s corporate balance sheet or its electric vehicle operations,” the company stated.

Market unfazed

Despite the positive governance signal, Ola Electric shares remained under intense selling pressure. The stock slid 7.7% on Tuesday and touched a fresh all-time low of ₹32.68 during Wednesday’s trading session.

Investors remain cautious following the company’s recent financial results, which showed a 43% year-on-year revenue decline in the September quarter, overshadowing the news of the pledge release.

Brief Summary

Ola Electric CEO Bhavish Aggarwal has sold a 0.6% stake in the company to repay a ₹260 crore personal loan, effectively releasing all pledged promoter shares. While the move clears a significant governance overhang, the stock fell to a record low of ₹32.68 on Wednesday, weighed down by weak quarterly earnings and broader market volatility.

Frequently Asked Questions (FAQs)

Q1: Why did Bhavish Aggarwal sell shares?

He sold shares to raise cash to pay off a personal loan of ₹260 crore. This loan was originally taken to fund his AI startup, Krutrim. By repaying it, he has “released” the shares that were held as collateral by lenders.

Q2: Is this good for the company?

From a governance perspective, yes. “Promoter pledges” (shares used as collateral for loans) are seen as a risk because if the stock price falls too much, lenders can force a sale, crashing the stock further. Clearing this debt removes that risk.

Q3: How much stake does he own now?

The promoter group’s stake has reduced slightly from 36.78% to roughly 34%. Aggarwal remains the largest shareholder and in control of the company.

Q4: Why is the stock still falling?

Investors are reacting to the company’s business performance, not just the promoter’s debt. Ola Electric reported a 43% revenue drop in the September quarter, which has hurt investor confidence more than the pledge release helped it.

Q5: What is Krutrim?

Krutrim is Aggarwal’s separate AI venture. The company says it has evolved into a profitable cloud infrastructure business, meaning it no longer requires funding from Aggarwal’s personal loans.