Tue Oct 08 05:11:17 UTC 2024: ## Ola Electric Stock Takes a Hit After Government Notice Over Customer Complaints
**New Delhi:** Shares of Ola Electric plunged over 5% in early trading on Tuesday after the company received a show cause notice from the central government for allegedly violating consumer rights. The notice follows thousands of complaints filed by customers regarding poor quality scooters.
The notice, issued by the Central Consumer Protection Authority (CCPA), alleges that Ola Electric, led by billionaire founder Bhavish Aggarwal, breached the Consumer Protection Act by engaging in misleading advertising and unfair trade practices. The complaints, exceeding 10,000 in the past year, were lodged with the National Consumer Helpline.
While the stock initially dropped sharply, it later recovered, trading 0.37% higher at Rs 90.95 per share by 9:50 am. This follows a steep decline of over 9% on Monday, marking a continued downward trend that has seen the stock lose nearly 11% in the past week and over 17% in the past month. Monday’s drop also saw the stock hit a lifetime low, falling below its listing day closing price of Rs 91.2 on August 9.
Ola Electric acknowledged receipt of the show cause notice and confirmed that it intends to respond to the CCPA. The company emphasized that the notice does not impact its financial, operational, or other activities, and does not involve any penalties or fines.
Despite the initial decline, the stock managed to recover some losses and traded 2.38% higher by 09:24 a.m. This performance was in contrast to the 0.07% decline in the NSE Nifty 50 index.
However, the stock’s future remains uncertain, with analysts offering mixed opinions. Four out of five analysts tracking the company maintain a ‘buy’ rating, while one suggests ‘sell’. The average 12-month consensus price target implies a potential downside/upside of 63.6%.
First Piper 