Ola Electric's stock is under scrutiny following a significant move by Hyundai Motor Company and Kia Corporation. On Tuesday, June 3, 2025, the South Korean automakers divested a substantial portion of their holdings in the electric two-wheeler manufacturer through block deals, amounting to ₹690 crore. This action has triggered considerable interest and discussion within the financial and automotive sectors, especially concerning the future trajectory of Ola Electric and the broader implications for India's electric vehicle (EV) market.
Hyundai Motor Company offloaded 10.8 crore shares at ₹50.7 apiece, totaling ₹551.9 crore, effectively exiting the company. Kia Corporation, also part of the Hyundai-Kia Automotive Group, sold 2.7 crore shares at ₹50.5 apiece, amounting to ₹137.3 crore. The shares were transacted via open market transactions on the National Stock Exchange (NSE).
Counterbalancing this exit, Citigroup Global Markets Mauritius, a US investment bank, emerged as a significant buyer, acquiring 8.61 crore shares at ₹50.55 per share for a total investment of ₹437 crore. While Citigroup's purchase demonstrates continued investor interest in Ola Electric, a notable aspect of the deal is that the identities of the buyers for the remaining stakes sold by Hyundai and Kia were not disclosed. This lack of transparency has fueled speculation and added an element of uncertainty to the situation.
The backdrop to this significant share movement involves Ola Electric's recent financial performance. The company's Q4 FY25 results revealed a consolidated net loss of ₹862 crore, a stark contrast to the ₹418 crore loss in the same period the previous year. Furthermore, operating revenue experienced a nearly 50% year-on-year decline, falling to ₹611 crore. The full fiscal year painted a similar picture, with net losses widening to ₹2,276 crore from ₹1,584 crore in FY24, and revenue from operations decreasing to ₹4,514 crore. Vehicle registrations also saw a decrease of over 52% during the quarter. These figures likely influenced Hyundai and Kia's decision to reduce their exposure to Ola Electric.
The initial investment by Hyundai and Kia in Ola Electric dates back to 2019, when the automotive giants jointly invested $300 million. Their recent exit signals a strategic pullback from their EV investment in India, five years after the initial investment. Hyundai held a 2.47% stake in Ola Electric as a public shareholder which they have now sold.
Following these transactions, Ola Electric's shares experienced a downturn, dropping over 8% to close at ₹49.61 on Wednesday, June 4, 2025, resulting in a market capitalization of ₹21,882 crore ($2.57 billion). Bhavish Aggarwal has stated that the company is now focused on increasing productivity in terms of both sales and stores for the next couple of quarters.
The departure of Hyundai and Kia marks a reduction in Ola Electric's strategic partners. The company now faces the challenge of navigating its path to profitability, with the key question being whether it can achieve this goal by FY26.
