Ola Electric shares surge 8%; S&P Global flags of issues at promoter entity

Shares of Ola Electric, already trading at a 52 week low and down 60% in 2025, opened lower on Thursday, December 11, after S&P Global downgraded promoter ANI Technologies' rating to 'CCC-' from 'CCC+' with a negative outlook. However, the stock erased early losses and are now trading 8% higher.

S&P said the lower rating reflects continued cash burn, weakening liquidity and a growing risk of a covenant breach.

A 'CCC-' rating indicates that default is likely in the near term or inevitable without a material improvement in financials.

ANI Tech, which owns a 3.6% stake in Ola Electric as of September 2025, has seen its cash buffers erode because of sustained operating losses in Ola Cabs. S&P expects cash and equivalents to drop below ₹200 crore in Q4 FY26.

The agency also warned that ANI Tech is likely to breach its covenant on March 31, 2026, which requires it to maintain cash equal to at least 40% of its term loan B, estimated at about ₹240 crore.

Operational challenges persist. Adjusted EBITDA losses are expected to widen to ₹590 crore in FY26, while revenue is expected to decline 25%-27% year on year.

The company's market share in the four wheeler ride hailing segment has plunged to 20%-25%, down from more than 50% two years ago. S&P also said ANI Tech's limited ability to absorb ongoing cash burn compared to bigger rivals such as Uber, which has more than $6 billion in cash.

Liquidity options remain constrained. The company relies heavily on equity funding and has a limited track record of securing bank financing.

Its 3.64% stake in Ola Electric is valued at roughly ₹450 crore after tax, but monetising it is difficult with the stock trading near all time lows around ₹35. IPO plans have been repeatedly pushed back since 2020, while outstanding CCPS of ₹19,500 crore account for nearly 95% of its adjusted debt.

S&P said the rating could be cut further if continued losses increase the risk of a liquidity event, covenant breach or if a debt exchange results in lenders receiving less than promised.

The outlook may turn stable if liquidity strengthens, cash flow improves and the risk of an immediate CCPS exit reduces, possibly via another extension of the IPO deadline.

On the operating side, Ola Electric's own market share continues to erode. In November, it slipped to fourth place in the e-two wheeler segment, with market share dropping to 6.7% from about 25% in January 2025.

Shares of Ola Electric Mobility are trading 8% higher on Thursday at ₹37.1. The stock is down 13.5% in the last one month, and was down over 80% from its post-listing high of ₹157.