Ola Electric rockets 8% intraday — but S&P warns of looming liquidity crunch; what should investors do?

Ola Electric Share Price: Shares of Ola Electric opened lower on Thursday, December 11, following a S&P Global downgrade of promoter ANI Technologies to ‘CCC-’ from ‘CCC+’ with a negative outlook. However, the stock recovered sharply and was trading 8.12 per cent higher at Rs 37.13 by 12:34 PM, up Rs 2.79. The stock had been under pressure in 2025, down nearly 60 per cent year-to-date, and trading near its 52-week low.

S&P flags cash burn and covenant risks

S&P said the downgrade reflects continued cash burn, weakening liquidity, and a growing risk of covenant breach. A ‘CCC-’ rating is indicative of a default that is likely to take place in the near term or inevitable without material improvement in financials. ANI Tech, holding a 3.6 per cent stake in Ola Electric as of September 2025, has seen cash reserves dwindle due to sustained operating losses in Ola Cabs. S&P expects cash and equivalents to drop below Rs 200 crore in Q4 FY26.

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The agency also warned that ANI Tech may breach its covenant on March 31, 2026, which requires maintaining cash equal to at least 40 per cent of Term Loan B, estimated at Rs 240 crore.

Operational challenges persist

ANI Tech’s adjusted EBITDA losses are projected to widen to Rs 590 crore in FY26, while revenue is expected to decline 25–27 per cent year-on-year. Ola Cabs’ market share in the four-wheeler ride-hailing segment has fallen to 20–25 per cent, down from over 50 per cent two years ago. S&P noted that ANI Tech’s limited cash buffer leaves it at a disadvantage compared with bigger rivals like Uber, which holds over $6 billion in cash.

Liquidity options remain constrained. ANI Tech relies heavily on equity funding, with a limited track record of securing bank financing. Its 3.64 per cent stake in Ola Electric, valued at roughly Rs 450 crore after tax, is hard to monetise with the stock trading near all-time lows around Rs 35. IPO plans have repeatedly been postponed since 2020, and outstanding CCPS of Rs 19,500 crore account for nearly 95 per cent of adjusted debt.

S&P cautioned that the rating could fall further if ongoing losses raise the risk of liquidity stress, covenant breach, or reduced lender recovery in a debt exchange.

Ola Electric market share continues to erode

On the operational side, Ola Electric’s e-two wheeler segment market share has slid to 6.7 per cent in November 2025, down from about 25 per cent in January.

S&P noted that the outlook could stabilise if liquidity strengthens, cash flow improves, and the risk of a CCPS exit reduces, potentially through another extension of the IPO timeline.