SoftBank Reduces Stake in Ola Electric to 15.7% Amid Market Pressures

SoftBank Group Corp has trimmed its holding in Ola Electric, paring its stake from 17.83% to 15.68%. The Japanese investment giant, led by Masayoshi Son, sold 94.9 million shares between July 15 and September 2, according to a stock exchange filing on Thursday. This marks the second major stake reduction by a large investor in recent months.

SoftBank’s Strategic Exit

The latest divestment reflects SoftBank’s cautious approach toward India’s competitive electric two-wheeler market. Although the company remains Ola Electric’s second-largest shareholder after founder Bhavish Aggarwal, the sale highlights shifting investor sentiment. The exact share sale price was not disclosed in the filing.

Other Investors Also Cutting Stakes

SoftBank is not alone in lowering exposure. Early backers such as Tiger Global Management and Z47 (formerly Matrix Partners India) also reduced their holdings earlier this year. Z47 sold less than a 1% stake, earning up to ₹187 crore, while Tiger Global’s Internet Fund II pared its stake to 3.24% by June, compared to 3.45% three months earlier.

In addition, Hyundai Motor Company and Kia Corporation offloaded around 108 million and 27 million shares respectively in June. Together, they raised nearly ₹689 crore through these stake sales. This series of exits underlines how Ola Electric’s investor base is gradually rebalancing.

Weak Financial Performance

The timing of SoftBank’s stake reduction comes as Ola Electric faces financial strain. During the June quarter, the company’s revenue nearly halved compared to last year. Net losses widened to ₹428 crore on revenue of ₹828 crore, down from higher levels a year earlier. Vehicle deliveries also dropped sharply, falling to 68,192 units from 125,198 in the same period.

These numbers indicate growing pressure on the company as it grapples with stronger competition in India’s electric scooter space. The decline in sales volumes and rising losses add to concerns about profitability.

Regulatory Relief Brings Some Support

However, Ola Electric received a boost last month after securing compliance certification under the government’s Production Linked Incentive (PLI) scheme for its Gen 3 scooter lineup. This certification makes the company eligible for incentives ranging from 13–18% of the sales value of these scooters.

The approval could provide some breathing room as Ola Electric seeks to strengthen its operations. It also comes at a time when the company has been facing scrutiny over safety concerns and customer complaints.

Shareholder Moves and Market Reaction

At its first annual general meeting since listing, Ola Electric shareholders approved the reallocation of IPO proceeds and extended the timeline for their deployment. This indicates that despite challenges, stakeholders remain aligned with the company’s long-term strategy.

Yet, investor caution is evident in the market. Shares of Ola Electric Mobility closed 6.34% lower at ₹64.59 on the BSE Thursday, even as the benchmark index gained 0.19%.

The decline in stock price highlights the mixed sentiment around the company’s future. While government support under the PLI scheme may offer some relief, sustained losses and increasing competition continue to weigh on its outlook.

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