Olectra Greentech says SPV with EVEY has not received any order cancellation notice yet

Shares of electric bus manufacturer Olectra Greentech Ltd. fell as much as 7% in early trading on Tuesday, May 27, after Maharashtra's Transport Minister, Pratap Sarnaik directed officials to cancel the tender order awarded to the company for failing to meet delivery timelines.

Sarnaik wrote on his social media handle on "X", without naming Olectra, that the company has been inactive in the supply of 5,150 leased buses and that he has directed officials to take action to cancel the said agreement.

The decision was taken on Monday evening during a meeting held at the Maharashtra State Road Transport Corporation (MSRTC) headquarters.

The minister further wrote that a revised schedule was given to Olectra for the supply of 1,000 buses by May 22, but not a single bus was delivered, raising doubts over the future delivery of the buses by the company.

"Therefore, it was decided that the tender agreement with the company should be cancelled," the minister wrote on "X."

However, it must be noted that Olectra Greentech has not made any official announcements regarding the cancellation of the order.

Olectra Greentech, on July 7, 2023, had announced that a consortium of Olectra and Evey Trans Pvt. Ltd.

was awarded a Letter of Intent (LoI) for the supply of 5,150 electric buses from the MSRTC. The order was valued at nearly ₹10,000 crore and the contract period was for 12 years.

Evey was supposed to procure the buses from Olectra Greentech and then deliver them to the MSRTC over the next 24 months (by July 2025), while Olectra would provide maintenance services over the entire contract period. The stock had jumped 20% that day post the announcement.

Between July 2023 and February 2024, the stock of Olectra Greentech more than doubled in value, making an all-time high of over ₹2,200 per share. The stock is down 40% from those levels as of Monday's closing.

Olectra Greentech also announced its quarterly results for the January-March period on Monday, where its revenue went up by 58% from last year, while net profit doubled. Its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was up by 70% on a year-on-year basis, while margins grew by 100 basis points.

The company is said to hold an analyst call to discuss the results on Wednesday, May 28, at 4:30 PM.

Megha Engineering and Infrastructure (MEIL) is the promoter of Olectra Greentech, having a 50% stake in the company at the end of the March quarter.

While Mutual Funds do not have a significant exposure to Olectra Greentech, as many as 5.2 lakh small shareholders, or those with authorised share capital of up to ₹2 lakh, had a 36.05% stake in the company at the end of the March quarter.

Shares of Olectra Greentech ended 4.2% higher on Monday at ₹1,348. Despite a 13% surge in the last one month, the stock is down 9.2% so far in 2025.