With 16,000 unregistered e-scooters, Ola Electric faces scrutiny over a sales-registration mismatch, risking investor trust, legal trouble, and a drop in stock value.
Ola Electric is facing potential regulatory scrutiny following a discrepancy between its reported sales figures and actual vehicle registrations. The company claimed to have sold 25,000 electric scooters in February; however, data from the Vahan portal, which tracks vehicle registrations, shows that only 8651 scooters were registered by the end of the month.
As per Monday’s update, the portal indicated 8230 scooter registrations, suggesting a significant gap of over 16,000 units. While some of these figures could include February sales, this still points to a mismatch.
Under the Motor Vehicle Act, vehicles must be registered with state transport departments within seven days of sale, with the Vahan portal serving as the official record of registrations. The gap between reported sales and actual registrations has raised concerns, with experts warning that this could undermine investor confidence in the company.
According to a report by the Financial Express, Shriram Subramanian, founder of InGovern Research Services, stressed the importance of an explanation from Ola, highlighting the risks to investor trust and suggesting that both the Securities and Exchange Board of India (SEBI) and stock exchanges may need to investigate the issue. Failure to clarify could result in penalties for the company.
Ola’s draft red herring prospectus, filed prior to its IPO, specifies that it recognises revenue only after scooters are delivered and registered on the same day. Industry insiders speculate that the company may have reported bookings as sales to improve market sentiment.
Furthermore, the Central Motor Vehicles Rules prohibit the delivery of vehicles without registration, raising potential legal risks for both Ola and its customers if this process is bypassed.
In related news, Ola Electric recently ended its partnership with registration service providers Rosmerta Digital and Shimnit India, opting to handle registrations internally. This comes amid an insolvency petition filed against its subsidiary for ₹245 million in unpaid dues. The company’s stock fell 7.18 per cent on the BSE following the news on Monday.
