SEBI Warns Ola Electric Over Disclosure Violations; Stock Drops 5%

The Securities and Exchange Board of India (SEBI) has issued a warning to Ola Electric for breaching disclosure regulations. The EV manufacturer disclosed this development to the stock exchanges on Wednesday, January 8.

The violation relates to Ola Chairman and Managing Director Bhavish Aggarwal’s announcement on social media prior to an official disclosure being made to the stock exchanges.

“The company (Ola Electric) received an administrative warning via email on January 7, 2025, issued by SEBI through its letter dated January 7, 2025,” the filing stated.

Following the announcement, Ola Electric’s stock price fell 5%, closing at ₹75.20 on the BSE. By 12 p.m., the stock had partially recovered, trading at ₹77.13, down 2.56%.

What Prompted SEBI’s Warning?

As per the filing, SEBI cited violations of several provisions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including sections 4 (1)(d), 4 (1)(f), 4 (1)(h), and 30 (6). These regulations mandate that information must be disseminated in a manner ensuring equal, timely, and cost-effective access for all investors.

SEBI’s warning letter specifically flagged Ola’s practice of using social media for announcements before filing disclosures with stock exchanges, highlighting a tweet from Aggarwal on December 2, 2024, about a four-fold expansion of Ola’s store network. The tweet was posted at 9:58 a.m., while the corresponding stock exchange disclosures were made later that day, at 1:36 p.m. (BSE) and 1:41 p.m. (NSE).

SEBI’s Warning to Ola

The letter emphasized that all material disclosures must first be made to stock exchanges within 12 hours of the event to ensure all investors have equal access to information. SEBI stated, “By failing to first disseminate the information on the stock exchanges and instead announcing it on a social media platform, you have failed to provide equal and timely access to information for all investors.”

What’s Next for Ola Electric?

SEBI labeled the violations as “serious” and urged Ola to enhance its compliance practices to prevent recurrence. The regulator warned that failure to comply in the future could result in “appropriate enforcement action.”

Additionally, SEBI instructed Ola to take corrective measures, present the issue and proposed remedies to its Board of Directors, and disclose SEBI’s communication to the stock exchanges.