Rosmerta Digital Services Files Insolvency Plea Against Ola Electric Subsidiary

Rosmerta Digital Services has filed a plea to initiate insolvency proceedings against Ola Electric Technologies, a wholly owned subsidiary of Ola Electric Mobility, for allegedly defaulting on its payment obligations.

The petition, submitted before the Bengaluru bench of the National Company Law Tribunal (NCLT), has alleged a payment default for services rendered and seeks initiation of corporate insolvency resolution process (CIRP) proceedings against Ola Electric Technologies. 

“We wish to inform you that a petition has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) by M/s. Rosmerta Digital Services Limited, an Operational Creditor of Ola Electric Technologies Private Limited, a wholly owned subsidiary of Ola Electric Mobility Limited…,” Ola Electric said in an exchange filing. 

Ola Electric Mobility said it disputes the claims and is taking legal advice to challenge the petition. “The company has sought appropriate legal advice and it strongly disputes the claims made. The company will take all necessary and appropriate steps to protect its interests and object to the allegations in the aforesaid matter,” the filing added. 

The development comes nearly a month after the Bhavish Aggarwal-led company said that it was renegotiating its agreement with its agencies Rosmerta Digital Services and Shimnit India. These renegotiations, the company said, would temporarily impact its vehicle registrations on the Centre’s Vahan portal.

While Rosmerta provides digital services for vehicle registrations, Shimnit manufactures high-security number plates.

Amid the renegotiations, Ola Electric Mobility saw registration of only 8,390 EVs on Vahan in February, a decline of over 65% month-on-month. However, the company claimed that it sold over 25,000 units last month.

Earlier this week, the EV company said it was in the final stages of revamping its vehicle registration process. This process was part of a cost-cutting exercise undertaken by the company amid rising losses. It said that the cost-cutting exercise has been completed and it is helping it reduce its cash burn by INR 90 Cr per month.

From rising losses and regulatory scrutiny to increasing competition and falling share price, Ola Electric Mobility has been fighting on multiple fronts for the last few months. Its net loss surged 50% year-on-year (YoY) and 14% quarter-on-quarter (QoQ) to INR 376 Cr in Q3 FY25. Revenue also slipped 19% YoY to INR 1,045 Cr during the quarter.

As a result, the company’s stock has been on a downward spiral. After touching an all-time low at INR 50.31 on the BSE earlier this week, the stock closed at INR 50.54. This was over 30% below its IPO price of INR 76 per share.

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