Ola Electric Moves Sebi For Settlement Over Alleged Misleading Disclosures: Report

Ola Electric and its founder-chairman, Bhavish Aggarwal, have moved the Securities and Exchange Board of India (Sebi) to settle proceedings linked to allegations that the company shared false and misleading information that may have influenced its stock price, as reported by ETPrime.

Filed on April 23, shortly after Sebi issued a show-cause notice on April 10, the application aims to resolve the issue “without admission or denial” of the allegations or legal findings. The case relates to claims around the company’s service network expansion, sales performance and timelines for its electric motorcycle rollout.

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Ola Electric said it has provided detailed responses to the allegations but is pursuing a settlement to avoid prolonged legal proceedings. The homegrown company’s stock has declined notably from its IPO level two years ago. Sebi’s notice followed an investigation into disclosures made between the firm’s market debut in August 2024 and May 2025, citing potential breaches of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and the Listing Obligations and Disclosure Requirements (LODR) Regulations.

People familiar with the matter were quoted as saying in the report that the company has held at least three rounds of discussions with Sebi since the notice was issued, focusing on inconsistencies in reported sales and registration figures.

The matter centres on announcements made in December 2024 regarding a rapid scale-up of the company’s sales and service network. Ola had informed stock exchanges of plans to expand to 4,000 locations by December 25, 2024, including more than 3,200 new outlets co-located with service centres.

The report added the company has maintained during discussions that there was no mala fide intent in how sales and registration data were reported. They added that engagement with the regulator is ongoing and such proceedings typically take time to conclude.

Sebi has alleged a mismatch between Ola Electric’s claims and its actual operational footprint. While the company stated on December 25, 2024 that it had opened over 3,200 co-located outlets, data later submitted showed only 452 such centres as of February 19, 2025, compared with 429 at the time of listing.

This indicates that only 23 additional co-located service centres were added after the IPO. The regulator noted that the company repeatedly highlighted the expansion through exchange filings and social media posts, including statements by Bhavish Aggarwal that “all stores have service capacity too” and references to “4,000 Ola stores & service centres”.

The disclosures came amid scrutiny over after-sales service. Sebi pointed out that Ola’s shares rose 8.45 per cent intraday on December 2, 2024, alongside a spike in trading volumes, suggesting a positive investor response to the announcements.

The regulator also raised concerns over a February 2025 disclosure claiming sales of more than 25,000 electric two-wheelers and a market share exceeding 28 per cent. Its investigation found that the figure of 25,207 reflected confirmed customer orders rather than actual sales.

Of these, only 5,341 vehicles were registered, while revenue was recognised on 2,848 units. Sebi alleged that the company shifted from reporting registrations to orders without clearly communicating the change. It further flagged claims that nearly 90 per cent of orders were fully paid, stating that advance payments accounted for around 68 per cent of the total order value and only 61 per cent of orders had payments exceeding 90 per cent. Additionally, 3,333 orders were later cancelled, including 2,560 by April 2025, without disclosure.