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Ola Electric Mobility unit rating downgraded by ICRA with a negative outlookICRA said that the battery cell manufacturing segment is technologically complex, and has significant dependence on imports for sourcing of raw materials. This segment is also exposed to geopolitical and region-specific risks for raw materials.By Sudarshan Kumar   | Hormaz Fatakia   May 5, 2025, 8:40:38 AM IST (Published)2 Min ReadOla Electric Mobility Ltd. shares will be in focus on Monday, May 5, after the company's unit, Ola Cell Technologies' ratings were downgraded to BBB- from A3, by ratings agency ICRA.

Outlook for this unit continues to remain negative.

"The downgrade in he long-term rating along with the continuation of the negative outlook factors in the weakening of the credit profile of the parent entity, due to weakening in the performance of Ola Electric Mobility's automotive unit, led by increased competitive intensity and a longer-than-expected road to profitability," ICRA wrote in its note.

Ola Cell Technologies began production of batteries with a 1.4 GWh capacity in March last year. The integration of battery cells in the group's products may begin only over the next few quarters, ICRA wrote in its note, adding that Ola Cell Technologies is exposed to the risks of timely execution, demand and offtake.

ICRA said that the battery cell manufacturing segment is technologically complex, and has significant dependence on imports for sourcing of raw materials. This segment is also exposed to geopolitical and region-specific risks for raw materials.

Among the strengths that the ratings agency highlighted in its note include the fact that Ola Cell Technologies enjoys strong operational and financial support from its parent entity, has an early-mover advantage in lithium-ion cell manufacturing, is also working with a favourable demand outlook for Electric Vehicles and is eligible under the ACC-PLI scheme to support project returns.

Sizeable capex plans over the medium-term, project being exposed to risks of execution, demand / offtake and exposure to competitive risks, are some of the credit challenges highlighted by ICRA for Ola Cell technologies.

Supported by a periodic infusion of funds from its parent company, liquidity is likely to remain adequate, ICRA said.

Shares of Ola Electric Mobility ended 0.3% lower on Friday at ₹48.53. The stock is down 37% from its IPO price of ₹76.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsOla Electric Mobilityshare market today