Pledge, Sell, Pledge Again: Bhavish Agarwal & Ola Electric’s Dilemma

For close to two years, Bhavish Aggarwal has been stuck between a rock and a hard place. All to keep Ola Electric and his other ventures going without giving up control of the company he built. 

Between November 2024 and March 2025, Aggarwal pledged Ola Electric shares to raise debt for Krutrim Data Centre, the AI infrastructure and services company that he founded in 2023. 

Then in December 2025, he sold part of his stake in Ola Electric to repay the ₹260 Cr loan that covered the pledge and release the encumbered shares, selling 3.93% of his holding in the company. 

At the time, Ola Electric said repaying the loan meant the company should operate with zero pledge overhang. But ten months later, another pledge is here. 

On 30 September, Aggarwal pledged 20 Cr Ola Electric shares, or 4.32% of the company, against non-convertible debentures (NCDs) issued by Krutrim Data Centre. 

CTL Trusteeship holds the pledge on behalf of the debenture holders. 

Neither the filings nor Ola have disclosed how much Krutrim Data Centre is raising through these debentures.

What is clear is that this is a bigger pledge than before — 20 Cr shares (4.32%) against 17.3 Cr shares (3.93%) that secured a ₹260 Cr loan in the previous instance.

Ola Electric said that the pledge is solely meant to fund his subscription to the company’s upcoming ₹1,000 Cr rights issue, and that no shares are being sold, and that Aggarwal will invest on the same terms as every other shareholder

Shriram Subramanian, founder of advisory firm InGovern Research, said that the EV firm scores poorly on what investors call the “say-do” ratio: how often a company does what it says. The situation around the pledges highlights this. 

He added that investors will read a founder pledging, clearing and pledging again as a sign of stress for the promoter or the promoter’s group entities, “and that may not be a good sign.”

Especially after Ola raised ₹780 Cr through a qualified institutional placement (QIP) in June 2026. Four months later, it is asking shareholders for more. 

Ola Electric’s Cash Problem

One thing we need to point out: Ola Electric’s rights issue is coming on the heels of the improved operating metrics. Market share rose from 5.1% in Q4 FY26 to 8.4% in Q1 FY27, but short of the 15–20% it targeted for 2026. 

But in the same quarter, rival Ather delivered 83,173 scooters, more than twice Ola’s 39,192, while posting a lower loss. 

Ola’s dealership rollout is still under way, and its gigafactory has not yet reached its 6 GWh target. Both are drags on its bottom line. 

In Q1 FY27, Ola Electric reported revenue of ₹455 Cr, down 45% from a year earlier and below its own guidance of ₹500–550 Cr. Its net loss narrowed to ₹336 Cr, the lowest in seven quarters, but free cash flow was still negative at about ₹351 Cr.

At that rate, the ₹780 Cr raised in June covers roughly two quarters of cash burn. The rights issue, approved by the board on 28 September, would add up to ₹1,000 Cr.

According to the draft letter of offer, about ₹350 Cr will go towards repaying or prepaying borrowings and ₹400 Cr towards organic growth. Of the money earmarked so far, nearly half goes to paying down debt.

These are partly paid shares, which means investors pay in installments. The issue price, entitlement ratio and payment schedule are yet to be announced.

The Idea Behind Pledging Instead Of Selling

A rights issue is offered only to existing shareholders, in proportion to what they already own. Aggarwal still holds roughly 26.2% of Ola Electric shareholding.

If he sits out this rights issue and does not buy in, his stake and therefore his control will shrink. 

According to the legal experts we spoke to, Agarwal also cannot simply borrow debt from Ola Electric. Section 67(2) of the Companies Act, 2013 bars a public company from giving financial assistance, directly or indirectly, through a loan, guarantee or security, for anyone to buy or subscribe to its own shares.

Selling shares to invest in the rights issue would be counterproductive to Aggarwal’s goal of maintaining his stake in the company, so pledging shares is the only option on the table  

The money comes through Krutrim Data Centre, which, as a company, can issue debentures in a way an individual cannot. Aggarwal has used this route before, with the same company and the same kind of pledge.

What has changed since is his priority. 

In December, he faced a similar choice and went the other way. 

With the stock near a record low at that time and his pledged shares closer to a margin call, he sold part of his stake to repay the loan and release the pledged shares. 

A margin call on pledged shares would have meant that Aggarwal would have had to deposit funds or securities to cover for the dropping market value of the pledged collateral. 

Aggarwal avoided this eventuality by selling a portion of his stake in December 2025, but now he is looking at pledging shares to protect his stake. For now at least, it would seem that retaining his control on Ola Electric matters more than any overhang from the pledge.

The Krutrim Link

The current shares pledged by Agarwal aim to secure debt on behalf of  Krutrim Data Centre. That also puts a private company’s balance sheet directly behind a listed company’s shares. 

If, for instance, Krutrim Data Centre struggles to repay these NCDs, the pledged Ola Electric shares are exposed, and could be sold by the lender group, even if Ola Electric has recovered financially. 

InGovern Research’s Subramanian said that if Krutrim’s debt goes bad and the lender enforces the pledge, it could sell the shares, which would weigh on the stock.

He called this an extreme scenario, but said the risk alone is an overhang: public investors will keep watching whether Krutrim is able to pay back the debt. But the lender has to give reasonable notice, sell, and return any surplus, and Aggarwal can redeem the shares until then. 

It is also not clear how the money raised by Krutrim reaches Agarwal, whether as a loan, an advance or in some other form, or whether all of it is meant for the rights issue.

That route of funds transfer from Krutrim to Agarwal also matters, according to VPS Law Associates’s VP Singh.

He says that under Section 185 of the Companies Act, a straight loan from Krutrim to Agarwal is not applicable, however it could be a likely scenario of Krutrim repaying some loan it already owes to Agarwal or Krutrim directly subscribing to Ola Electric rights issue through entitlements Aggarwal renounces in its favour. 

For Ola Electric itself, this would not be a related-party question. “A transaction only between Krutrim and Aggarwal does not automatically become an Ola Electric related-party transaction. That will kick in when Ola Electric or its subsidiaries deal with a related party,” Singh added.

In the scenario that the lenders decided to enforce the pledge, Ola Electric’s board would have no say. “The shares are the promoter’s property and freely transferable; the company’s obligation is only confined to disclosure,” Singh said. 

Can Falling Stock Trigger A Crisis? 

A pledge is a loan secured by shares, and the value of that security moves with the stock price. That is exactly what makes it a double-edged arrangement.

At around ₹37 a share, the 20 Cr pledged shares by Agarwal are worth roughly ₹740 Cr. 

Brokerages like Citi have set a target price of ₹26 for the next 12 months, indicating that investors should sell. 

Lenders in a pledge arrangement typically respond to a price fall by asking the borrower to pledge more shares. If the promoter cannot provide them, lenders can sell the pledged shares in the market.

That is likely to result in a runaway effect where the price is pushed down further, triggering the call  for more shares or more funds to cover the pledge. 

Subramanian elaborated, but he stressed that this is an extreme scenario. “If Ola’s stock keeps falling, the value of the pledged shares drops against the margin the lender requires. So more and more shares would have to be pledged. Either the promoter pledges more shares to hold the margin, or investors sell their shares to recover some money, which adds to the downward spiral,”

Ola Electric’s investors have already seen a version of this. When Aggarwal sold shares in December to clear his earlier pledge, the stock fell 11% in two days and came close to its record low. 

Ola Electric’s stock has fallen about 30% over the past year and trades at less than half its IPO price of ₹76.

While legally, there is no law that bars Agarwal from pledging the shares in a listed firm to secure debt for his private company, the cost he and Ola Electric pay is of credibility. The share entitlements to key shareholders and the schedule of funds payments will all be keenly watched out for.

After that, the question is purely operational in nature. Ola needs to bring its quarterly cash burn down before the money from the QIP and the rights issue runs out. 

If Ola Electric needs to raise money again, Agarwal will face the same choice between selling and borrowing, and the cycle will begin anew. 

MARKETS WATCH: NEW ISSUES, POST-IPO JOURNEY & MORE

Snapdeal Parent AceVector Lists At 11.6% Discount: AceVector debuted on the BSE at ₹28.30 on October 5, against its IPO price of ₹32, and closed the day 18.4% below the issue price at ₹26.10. Its market cap at close stood at ₹1,420.3 Cr, versus an IPO valuation of ₹1,741.4 Cr.

ideaForge CEO Pledges 2.8 Lakh Shares: Promoter and CEO Ankit Mehta pledged 0.56% of the drone maker’s share capital, worth about ₹20.56 Cr, in favour of Infina Finance for “personal financial requirements”. The pledge comes months after ideaForge raised ₹500 Cr via a QIP in July.

Peak XV Halves Awfis Stake Via ₹30 Cr Bulk Deal: Peak XV sold 12.2 lakh Awfis shares at ₹245 apiece, offloading more than half of the 3.24% stake it held at the end of June. Awfis closed Friday 3.7% higher at ₹247.15, near its 52-week low of ₹229.55.

FirstCry’s Swara Baby Products Gets SEBI Nod For ₹1,000 Cr IPO: The Brainbees Solutions subsidiary has secured the markets regulator’s approval for its proposed ₹1,000 Cr public issue.

AITMC Files Updated DRHP: The agri-drone company has filed its UDRHP for a fresh issue of up to 3.5 Cr shares, about ten months after receiving SEBI’s nod. It reported a ₹13.4 Cr profit in FY26 on revenue of ₹106.8 Cr.

StockGro Parent Files Confidential DRHP: AssetGro Fintech is targeting an IPO of up to ₹2,500 Cr, including an ₹800 Cr fresh issue, even as StockGro raises $10.4 Mn in a Series B led by BITKRAFT Ventures.

That’s all for this week.

Bismah Malik

The post Pledge, Sell, Pledge Again: Bhavish Agarwal & Ola Electric’s Dilemma appeared first on Inc42 Media.