Ola Electric files application to settle Sebi probe over false information allegations

Ola Electric and the two-wheeler maker’s founder-chairman, Bhavish Aggarwal, have approached the Securities and Exchange Board of India (Sebi) to settle proceedings related to allegations the company disseminated false and misleading information to potentially inflate the stock price. ET has seen a copy of the settlement offer.

The settlement application, filed on April 23 after Sebi issued a show-cause notice on April 10, seeks to resolve the matter “without admission or denial" of facts and legal conclusions. Allegations pertained to misleading information on service network expansion, sales performance and electric motorcycle rollout timelines.

The company said it has detailed explanations to the allegations but is seeking an amicable closure to avoid prolonged litigation. To be sure, the Ola stock has fallen significantly from its IPO price two years ago.


The regulator's notice followed an investigation into disclosures made by Ola Electric between its August 2024 stock market listing and May 2025. Sebi alleged violations of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and the Listing Obligations and Disclosure Requirements (LODR) Regulations.

Sources close to the company said Ola Electric has held at least three rounds of discussions with Sebi officials following the show-cause notice issued in April over discrepancies related to sales and registration numbers.

Queries sent to Ola and Sebi on Monday remained unanswered until the publication of this report.

At the heart of the case are Ola Electric's announcements in December 2024 claiming a rapid expansion of its sales and service network. The company had informed exchanges that it would expand its store network to 4,000 locations by December 25, 2024, with over 3,200 new stores co-located with service centres.

According to the sources, the company's position during these discussions has been that there was no mala fide intent behind the reporting of sales and registration figures. They added that engagements with the market regulator have been ongoing for some time and such matters typically take time to reach a resolution.

'Evident gaps'

Sebi alleged that Ola Electric's claims on service network expansion did not match its actual operational footprint. While the company announced on December 25, 2024 that it had opened more than 3,200 stores co-located with service centres, data later submitted to the regulator showed only 452 such outlets as of February 19, 2025, compared with 429 at the time of its IPO.

According to Sebi, only 23 additional co-located service centres had effectively been added since listing.

The regulator said Ola 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".

Sebi referred to disclosures that came amid criticism over after-sales service and regulatory scrutiny. The notice said Ola's shares rose 8.45% intraday on December 2, 2024, while trading volumes hit a peak, suggesting investors reacted positively to the announcement.

Sebi also questioned Ola's February 2025 disclosure that it had sold more than 25,000 electric two-wheelers and held over 28% market share. The investigation found the cited figure of 25,207 represented confirmed customer orders rather than sales.

Of these, only 5,341 vehicles were registered and revenue was recognised on 2,848 vehicles. Sebi alleged the company switched from reporting registrations to orders without adequately disclosing the change. It also flagged claims that nearly 90% of orders were fully paid, noting advance payments accounted for about 68% of total order value and only 61% of orders had received payments exceeding 90%. Further, 3,333 orders were later cancelled, including 2,560 by April 2025, without disclosure.

Roadster

A third set of allegations relates to the Roadster motorcycle programme.

Sebi alleged Ola failed to adequately disclose delays and pending prototype approvals despite committing deliveries by March 2025. The regulator also alleged that Ola announced Roadster X deliveries had commenced in May 2025 even though no deliveries took place that month. Aggarwal later acknowledged deliveries began only in June.

Sebi has held Aggarwal responsible as promoter, managing director and the company's sole executive director, alleging he amplified the disputed claims through corporate communications and social media.

In its settlement application, Ola Electric and Aggarwal said they reserve the right to contest the allegations on merits but have proposed settling any potential proceedings upon payment of a settlement amount to be determined by Sebi. The applicants have also sought a hearing before the regulator's internal committee under the settlement framework.

The sources said the company remains optimistic about the outcome of the discussions.

Ola's stock for the past year has been trading well below its IPO price of Rs 76 and the company's market capitalisation has also reduced to Rs 20,400 crore.

Currently, Ola's share's are trading near Rs 43-44, which is a significant drop from its post-IPO peak of over Rs 140 per share in August 2024. Based on Vahan registration data, the company has a market share of about 9%.

Earlier this month, Ola also launched a qualified institutional placement (QIP) to raise up to Rs 500 crore, fixing a floor price of Rs 37.74 per share, amid increasing competition from other electric two-wheeler players.