Hyundai and Kia Exit Ola Electric with Rs 690 Crore Stake Sale

Hyundai and Kia have exited Ola Electric, selling their entire stake for a total of Rs 690 crore through block deals conducted on Tuesday. This move indicates a strategic withdrawal from their electric vehicle investment in India.

Hyundai divested its 2.47% stake, valued at Rs 552 crore, while Kia sold its 0.62% interest for Rs 137 crore, as reported by the bulk deal data from NSE.

Background of the Investment

This exit follows over five years after the two major automakers, part of the same parent group, jointly invested $300 million in Ola Electric back in 2019.

Details of the Sale

Citigroup Global Markets Mauritius acted as the primary buyer in this transaction, acquiring a 1.95% stake (8.61 crore shares) for Rs 435 crore. Interestingly, the identities of the other buyers involved remain undisclosed.

Financial Performance of Ola Electric

This stake sale follows a disappointing financial report from Ola Electric for the last quarter of FY25. The company revealed a consolidated net loss of Rs 862 crore in Q4, significantly higher than the Rs 418 crore loss reported in Q4 of FY24. Additionally, its operating revenue saw a decline of nearly 50% year-on-year to Rs 611 crore. Over the full fiscal year, the company’s net loss expanded to Rs 2,276 crore compared to Rs 1,584 crore in FY24.

Market Reaction

Following the announcement, Ola Electric’s shares plummeted by over 8%, closing at Rs 49.61 on Wednesday, which reduced its market capitalisation to Rs 21,882 crore (approximately $2.57 billion).

Future Prospects for Ola Electric

Hyundai and Kia’s exit may limit the number of strategic partners for Ola Electric; however, Citi’s investment indicates that there remains some interest from investors. Given the increasing losses reported after going public, a critical question is whether Ola Electric can achieve profitability by FY26. Notably, more than 63% of the stakes sold by Hyundai and Kia were acquired by investors whose identities are yet to be revealed.