Ola Electric shares are down 60% in 2025. Is there a bottom-fishing opportunity here?

Ola Electric Mobility’s shares are nursing deep losses in 2025, down about 60% year to date and more than 80% from their peak, yet a sharp rebound late last week has reignited debate over whether the worst is finally priced in. The stock jumped nearly 10% on Friday after the company said founder and Chief Executive Officer Bhavish Aggarwal had sold a small portion of his personal stake to repay debt and eliminate all promoter pledges, lifting sentiment even as technical indicators continue to flash caution.

The electric scooter-maker’s shares rose to Rs 34.38 on Friday, snapping a three-session losing streak, after the company disclosed that Aggarwal had completed a one-time stake sale to fully repay a promoter-level loan of about Rs 260 crore. The relief rally followed weeks of sustained selling pressure that had pushed the stock to fresh lifetime lows, leaving investors to weigh whether the bounce signals early stabilisation, or merely a pause in a still-intact downtrend.

Promoter pledge removal lifts sentiment

In an exchange filing released in the post-market hours of December 18, Ola Electric said Aggarwal had sold part of his stake to retire the promoter-level loan, releasing all 3.93% of shares that had been pledged.

“Following the transaction, the promoter group continues to hold 34.6% in Ola Electric, with no dilution of promoter control or change in long-term commitment. This was a planned, time-bound exercise executed entirely at the promoter’s personal level and has no impact on the company’s performance, operations, or strategic direction,” the company said.

Aggarwal had earlier told exchanges that he had undertaken a “one-time, limited monetisation” of his personal stake to remove pledge-related risks. “This action is taken to eliminate all promoter pledges, which can introduce avoidable risk and volatility,” he said, adding that it reflected his conviction that the company should operate with “zero pledge overhang.”

A steep fall sets the backdrop

The rally came after a sharp drawdown. Ola Electric shares had fallen more than 17% in just three sessions as Aggarwal sold shares through bulk deals, including a 0.6% stake sale worth Rs 90.28 crore on December 19, when he sold 2.83 crore shares at Rs 31.90 apiece. The stock had slid to an all-time low of Rs 30.76 on December 18 and remains down more than 80% from its record high of Rs 157.4 hit in August last year.

Trading volumes spiked alongside Friday’s rebound, with more than 19.42 million shares changing hands, nearly 4.8 times the 30-day average, reflecting heightened short-term interest in a stock that has been under sustained pressure.

Despite the bounce, the broader trend remains weak. The stock is down about 6% this week and is trading below all eight of its key simple moving averages, from the 5-day through the 200-day, pointing to persistent bearish undertones across short-term, medium-term and long-term charts.

Oversold signals, limited confirmation

From a momentum standpoint, Ola Electric looks stretched. The Relative Strength Index stands at 23.1, below the 30 threshold that typically signals oversold conditions, increasing the probability of a short-term rebound. At the same time, the Moving Average Convergence Divergence indicator remains deeply negative at -3.1 and below both its center and signal lines.

“After the sharp relief rally, the near-term upside for Ola Electric Mobility appears capped within a technical pullback zone rather than a trend reversal target,” said Harshal Dasani, Business Head at INVasset PMS. He said any upside should be viewed as a mean-reversion move toward declining short-term averages, rather than the start of a new uptrend.

“The bounce lacks confirmation from momentum or volume expansion, suggesting it is reactive rather than conviction-driven,” Dasani said, adding that until the stock reclaims and sustains above its 20-day and 50-day moving averages, upside projections should remain conservative.

Fragile supports, stiff resistance

On the downside, Dasani said the stock’s fresh lifetime lows make support levels fragile. The first reference point lies near the recent intraday low, while any sustained breach below that level would suggest the rebound is failing structurally. “What is notable is the absence of strong base-building volume near these levels,” he said, indicating that long-only institutional accumulation remains tentative.

On the upside, immediate resistance is clustered around the prior breakdown zone that coincides with the falling 20-day moving average, while the 50-day moving average represents a more formidable medium-term hurdle. “Rallies are likely to face selling pressure,” Dasani said, describing these levels as more relevant for booking bounce-led gains than for initiating fresh medium-term positions.

Rebound versus reversal

With RSI deeply oversold but MACD still negative, the current setup points to sharp but potentially short-lived rebounds rather than a durable trend change. Dasani said the move fits the profile of a technical relief rally driven by short covering and sentiment relief following clarity on promoter pledges.

For the stock to move beyond that, he said it would need to form higher lows, see RSI hold above the 40-45 zone, witness a bullish MACD crossover with rising volumes, and reclaim the 50-day moving average, signals that are not yet in place.

While the complete removal of promoter pledges is “structurally positive” and improves governance and balance-sheet optics, Dasani said markets remain wary of the supply overhang created by repeated promoter stake sales.

After an almost 80% fall from its peak, valuations have compressed, but experts cautioned that valuation comfort alone is unlikely to drive a sustained re-rating. The stock, Dasani said, is now firmly in “prove-it growth” territory, where future returns will hinge on execution, cash flows and balance-sheet stability rather than narrative.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)