Olectra Greentech Share Price Tanks Over 12% After Maharashtra Cancels E-Bus Tender

Market Performance

Olectra Greentech's share price witnessed a sharp decline during Tuesday's trading session.

• Opened at: ₹1,234.95 on BSE
• Intraday High: ₹1,288
• Intraday Low: ₹1,180
• Decline: Over 12%

This significant drop comes amid fresh concerns around the company's delivery commitments in a key government contract.

Tender Cancellation Sparks Sell-Off

The steep decline in Olectra Greentech's share price was triggered after Maharashtra's Transport Minister, Pratap Sarnaik, directed officials to cancel an electric bus tender awarded to the company.

• The decision was made following a high-level meeting at the MSRTC headquarters on Monday evening.
• Sarnaik announced via social media that the company failed to supply 5,150 leased buses.
• Despite being given a final timeline to deliver 1,000 buses by May 22, the company reportedly failed to provide any of them by that date.

These delivery failures have cast doubt over the company's ability to meet future obligations, prompting authorities to withdraw the tender.

Company Details

While the minister's post did not directly name Olectra Greentech, reports confirmed the company was at the center of the controversy.

• EveyTrans Pvt Ltd, a subsidiary of Olectra Greentech, secured the original tender in May 2022 to deliver 2,100 electric buses to BEST (Brihanmumbai Electricity Supply and Transport).
• So far, only 536 buses have been supplied under the wet lease model, where companies provide not just the vehicles but also drivers and maintenance.

Despite missing previous delivery targets, Olectra reportedly received another contract in April 2024 to supply an additional 2,400 electric buses. The current developments now put that deal under scrutiny as well.

As of now, Olectra Greentech has not issued an official statement regarding the cancellation.

Summary

The recent collapse in Olectra Greentech's share price underscores the risks associated with large-scale government contracts, particularly in sectors such as electric mobility, which require high capital and logistical efficiency.

With Maharashtra's transport department pulling the plug on a key agreement due to delivery delays, the market responded swiftly. Investors will now closely watch the company's next move and whether an official clarification is issued.