Shares of electric two-wheeler maker Ola Electric crashed as much as 7.6% to hit an intraday low about ₹29 on the BSE today (October 23) after a bearish outlook from Goldman Sachs. 

A day after the company opened its ₹1,000 Cr rights issue, Goldman Sachs downgraded its outlook on Ola Electric to “Sell”. The brokerage slashed the stock’s price target to ₹23.

It foresees a challenging path for Ola Electric to become cash flow positive given the relatively high interest cost and capex needs of the cell and E2W business.

It also cut the EV maker’s top line growth projections by up to 10% for the period FY27-29.

The bearish momentum comes a day after Ola Electric opened its rights issue for bidding. Within hours of opening the issue, Motilal Oswal and Calliope Capital Advisors applied for a combined 2.39 Cr shares against entitlements transferred by two promoter group entities — ANI Technologies and Indus Trust. 

Founder and CMD Bhavish Aggarwal pledged a 4.32% stake in the electric two-wheeler maker to fund his participation in the company’s proposed rights issue of up to ₹1,000 Cr.

Ola Electric plans to use the proceeds from its ₹1,000 Cr rights issue primarily to reduce debt and fund business expansion as it looks to strengthen its financial position and move towards cash-flow breakeven. 

Of the total proceeds, ₹350 Cr has been earmarked for the repayment or prepayment of borrowings, including accrued interest and applicable penalties, while ₹400 Cr will be invested in organic growth across its electric mobility and energy storage businesses.

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