SEBI Issues Warning Letter to Ola Electric Mobility Over Disclosure Norm Violation; Shares Slip 4%

The Securities and Exchange Board of India (SEBI) warned Ola Electric Mobility on January 7, 2025, for violating disclosure norms. The warning concerns the delayed disclosure of the company's expansion plans to stock exchanges.

Key Points:

Violation Details:

• On December 2, 2024, Bhavish Aggarwal, Chairman and Managing Director of Ola Electric, announced on social media platform X (formerly Twitter) the company's plans to increase its store count from 800 to 4,000 in a single month.
• This announcement was made at 9:58 AM, while the disclosure to stock exchanges occurred later at 1:36 PM (BSE) and 1:41 PM (NSE) on the same day.

SEBI's Rules:

• SEBI mandates that material information must first be disclosed to stock exchanges within 12 hours of occurrence or as soon as reasonably possible.
• SEBI noted that Ola Electric's failure to share information with stock exchanges promptly compromised stakeholder interests.

Regulator's Warning:

• SEBI issued a stern warning to Ola Electric, advising the company to:
  • Improve compliance practices.
  • Place the warning letter and corrective measures before the Board of Directors.
  • Disseminate the letter on all stock exchanges where the company is listed.
• SEBI warned of potential enforcement action in case of repeated violations.

Impact on Stock:

• Following the announcement of SEBI's warning, Ola Electric shares declined by 4.28% to ₹76.14 per share in morning trade on January 8. (9:35 AM)

Company's Response:

• Ola Electric stated in an exchange filing that the warning has no financial implications.