Bhavish Aggarwal raises loans by pledging 25% more Ola Electric shares. Should Investors Be Worried?

In a move that raised questions about founder risk and shareholder protection, Ola Electric chairman and chief executive Bhavish Aggarwal increased his committed stake in the company by two percentage points, from 8.09% to 10.11%, during the September quarter, effectively pledging almost a quarter more of his holdings to fund another unnamed entity.This is the third such commitment since Ola Electric’s listing in August 2024, with Aggarwal turning to his company’s shares for funding.

Exchange filings show that Aggarwal pledged 13.38 crore shares, representing 10.11% of Ola Electric’s equity in the September quarter, compared to 10.71 crore shares (8.09%) in the June quarter. The additional shares were pledged as collateral to Aditya Birla Capital to raise an undisclosed loan for an undisclosed group company. More than a tenth of Aggarwal’s total 30.02% stake in Ola Electric is now encumbered.Aggarwal had earlier pledged Ola Electric shares in November 2024 and February 2025, when he turned to Axis Trustee Services, Avendus Structured Credit Fund II, Avendus Finance Pvt. Ltd., and Incred Credit Opportunities Fund I to finance his private artificial intelligence venture, Krutrim.

While promoters often pledge shares to raise capital, Aggarwal’s repeated pledge stands out because it is not to fund Ola Electric, but rather his separate, private AI startup.

Additional risk for shareholders? Pledging of shares by promoters is often seen as a red flag for investors as it can increase financial risk: if the borrower defaults, lenders could sell the pledged shares, potentially driving down the share price. Aggarwal’s move even more closely ties the fate of Ola Electric’s stock price to its personal financing activities, reminiscent of Elon Musk’s 2022 pledge of Tesla shares to finance his $44 billion Twitter (now X) acquisition. Shares of Ola Electric have fallen 43% since its listing and more than 36% since Aggarwal’s initial commitment in November last year. Bloomberg reported in June that Aggarwal had to top up Rs 20 crore in collateral after the shares fell below Rs 50.

Adding to the pressure, the company recently cut its FY26 revenue guidance by almost a third, to Rs 3,000-3,200 crore, leading to a double-digit 5% decline in stock prices within a week.

Meanwhile, Ola Electric has been working to strengthen its balance sheet. Last month, the board approved an equity raise of Rs 1,500 crore, just five months after clearing Rs 1,700 crore worth of non-convertible debentures (NCDs) to refinance existing debt. According to company filings, the total debt and interest liabilities due in FY30 is Rs 2,114 crore.

Aggarwal said during the June quarter earnings call on July 14: “We do have some debt obligations… We will refinance some of that debt, not the term loans, but some of the corporate debt that we had taken on prior to our IPO.”

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