Ola Electric Shares Face Pressure as Bhavish Aggarwal Pledges More Equity for AI Venture

Bhavish Aggarwal, founder of Ola Electric and the artificial intelligence startup Krutrim, has pledged an additional 5.88 crore shares of Ola Electric to secure funding for his AI startup. The move represents the second installment of share pledging by Aggarwal to finance his artificial intelligence venture, bringing total encumbered shares to approximately 2.43 percent of Ola Electric's equity.

The pledged shares, valued at about Rs 603 crore at the current share price of around Rs 56.40, have been placed under a non-disposal undertaking, which means Aggarwal retains ownership but is barred from selling or transferring them. The shares serve as collateral for debentures issued to institutional lenders including Avendus Structured Credit Fund II, Avendus Finance, and InCred Credit Opportunities Funds.

Aggarwal's latest move follows an earlier pledge of 4.83 crore shares in December 2024. According to regulatory filings, this represents the second and final pledge to fund Krutrim, the AI startup whose name means "artificial" in Sanskrit and aims to build a complete AI computing stack.

The share pledging comes at a challenging time for Ola Electric, which has seen its stock price decline significantly since its public market debut. The shares were listed at Rs 76 on August 9, 2024. Since then, the stock has declined by about 30%, currently trading at Rs 53.24. The decline is more pronounced when compared to the stock's peak performance, with shares having fallen 66 percent from their 52-week high of Rs 157.53.

Ola Electric's financial performance has also shown strain. In its latest quarterly results for Q4 FY25, Ola Electric reported a consolidated net loss of Rs 870 crores in the fourth quarter, which is a rise of over 109% compared to the previous year. Revenue declined to Rs 611 crore from Rs 1,598 crore in the same quarter of the previous year.

The company's market position has weakened substantially in the electric two-wheeler segment. The company's market share dropped from 49.2% in May 2024 to 20% in May 2025, which is a decline of 29.2 percentage points over one year, according to Vahan portal data. TVS Motor has emerged as the new market leader with a 25 percent share.

Aggarwal has been investing heavily in Krutrim since its launch. In February, Aggarwal announced a Rs 2,000 crore investment in the venture and committed to investing Rs 10,000 crore by next year. The startup achieved unicorn status in January 2024 after raising $50 million in funding led by Matrix Partners India, making it India's first AI unicorn.

Aggarwal owns slightly more than 30% of Ola Electric and has been steadily increasing his investments in Krutrim. The AI startup has launched an Android application for its chatbot, designed to compete with established players like OpenAI's ChatGPT, Google's Gemini, and Microsoft's Copilot.

Share pledging allows promoters to raise funds without diluting their ownership stake in a company. However, it carries risks, as lenders can sell the pledged shares if loan obligations are not met, potentially impacting the stock price. Market analysts typically view significant share pledging by promoters with caution, particularly when companies are facing operational challenges.

Despite current difficulties, Ola Electric maintains its position as a significant player in India's electric vehicle market and continues expansion efforts. The company recently announced plans to increase its retail network and remains focused on achieving profitability in the coming financial year.