SYNOPSIS: EV company reallocates Rs. 575 crore from R&D to debt repayment and growth amid slowing sales and funding challenges, with significant upcoming debt obligations influencing capital allocation strategy and IPO fund utilisation.
Ola Electric Mobility Limited has stayed in the spotlight ever since its market debut. Over the past year, the company has struggled with declining market share, heavy cash burn, and weak stock market performance. The stock is once again in the spotlight after the company reported reallocating IPO proceeds from R&D toward debt repayment amid rising financial pressures.
During Monday’s trading session, shares of Ola Electric Mobility Limited were trading in the red at Rs. 23.5, down by around 5 percent, with a market cap of Rs. 10,365 crores. The company, which debuted on the stock exchanges in August 2024 at a listing price of Rs. 76 per share, has witnessed its stock decline by nearly 70 percent since listing.
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Ola Electric Mobility Limited appears to be recalibrating its financial priorities, as it redirects a portion of funds initially set aside for innovation toward debt repayment. This move reflects the growing pressure on the electric vehicle (EV) player amid slowing sales momentum and delays in raising fresh capital.
In a recent stock exchange filing, the company disclosed a revision in the utilisation of its Rs. 5,500 crore IPO proceeds. It plans to reallocate Rs. 575 crore from its research and product development budget toward debt reduction and select growth initiatives.
The proposal, approved by the board on 18th March and subject to shareholder consent, involves diverting Rs. 575 crore from the Rs. 1,505 crore originally earmarked for R&D. Of this, around Rs. 475 crore will be used for repayment or prepayment of borrowings, while the remaining Rs. 100 crore will be deployed toward organic growth plans.
The decision to trim R&D allocation comes against the backdrop of upcoming debt obligations, with repayments of Rs. 526 crore due in FY26 and Rs. 610 crore in FY27, excluding any short-term liabilities.
Out of the Rs. 5,275 crore already raised through the IPO, the company has utilised approximately Rs. 3,982 crore across various areas, including general corporate purposes, growth initiatives, R&D, and debt repayments. This leaves a remaining balance of about Rs. 1,293 crore yet to be deployed.
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Ola Electric Mobility Limited is an Indian electric vehicle (EV) manufacturer engaged in the development and production of EVs and core components, including battery packs, motors and vehicle frames through vertically integrated operations. It conducts in-house R&D and is building the Ola Gigafactory for cell production. Ola follows a direct-to-customer (D2C) distribution approach to sell its products.
For the quarter, the company posted a revenue from operations of Rs. 470 crores, reflecting a sequential decline of around 32 percent QoQ compared to Rs. 690 crores in Q2 FY26. Likewise, on a year-on-year basis, revenue fell by nearly 55 percent from Rs. 1,045 crores recorded in Q3 FY25.
Net loss for the quarter stood at Rs. 487 crores, reflecting a sequential increase of around 16 percent compared to Rs. 418 crores in Q2 FY26. However, on a year-on-year basis, losses narrowed by around 14 percent from Rs. 564 crore recorded in Q3 FY25.
On 18th December 2025, Ola announced that its promoter and CEO, Bhavish Aggarwal, had completed the sale of a small portion of his personal stake to fully repay a promoter-level loan of around Rs 260 crore.
Following this update, the company’s shares rose over 4 percent on 23rd December, as it announced that the proceeds from the stake sale were used for the repayment of debt, along with interest and related charges, while the remaining amount will be utilised to meet applicable tax liabilities in due course.
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