MUMBAI: 4th May 2025: Ratings agency ICRA Ltd has downgraded Ola Electric Technologies Ltd’s credit rating from ‘A (Negative)’ to ‘BBB+ (Negative), projecting that the company’s losses for FY25 may increase to between Rs 1,900 and 2,000 crore, up from Rs 1,600 crore in FY24.
ICRA revised the rating due to a variety of factors, including a significant decline in sales and ongoing financial difficulties as a result of a significant decrease in registrations of Ola’s electric scooters.
In April 2025, the Bengaluru-based manufacturer sold 19,709 units, down from over 34,000 previously.
Despite an initial strong performance (capturing 52% of the e-scooter market by April 2024), Ola has faced challenges in recent months. ICRA stated that fierce competition from companies such as Bajaj Auto, TVS Motor, and Ather Energy will necessitate increased investments, potentially straining its credit profile.
The agency also expressed concern about a slower-than-expected scaling process, ongoing cash burn, and a longer path to profitability.
The company’s operating margins have remained negative, with an operating margin (OPM) of -26.7% in the first nine months of FY25, down from -22.7% in FY24.
According to ICRA, the ability to mitigate operational losses and achieve profitability will be a critical factor to monitor, as margins are negative 26.7% in the first nine months of fiscal year 25.
Additional issues arise from regulatory scrutiny due to discrepancies between reported sales and vehicle registrations, as well as complaints about delivery delays.
Although Ola reported 25,000 sales in February, only 8,500 units were officially registered due to cancelled registration contracts and unfulfilled bookings. With declining revenues and the need for increased investment, ICRA is closely observing Ola’s financial and operational stability.
