Goldman Sachs has turned negative on Ola Electric, cutting its target price on the electric two-wheeler maker to Rs 23 from Rs 39.28. The revision implies a 23 percent fall from the stock’s last close of Rs 29.90, and the brokerage expects the shares to trade below Rs 25 in the near term.

A Steep Cut After A Weak Run

Friday alone brought a fall of about 7 percent. The stock has lost close to 28 percent in the past month and 44 percent over the past year. Its 52-week high stands at Rs 53.47, while the low is Rs 20.83, a range that shows how quickly sentiment has moved on the company.

Cash Flow And Capex Worries

Goldman Sachs said recovery looks difficult because of rising concerns over cash flow, funding needs and operating challenges. The firm warned that generating positive free cash flow will be a hard task while high interest costs and heavy capital expenditure keep pressure on the balance sheet.

It also trimmed its revenue estimates for FY27 to FY29 by up to 10 percent, citing stiff competition for market share and the prospect of operating losses lasting longer than earlier expected. FY26 revenue was already 55 percent lower than FY24, which makes rapid growth in the coming years a tall ask.

Rights Issue In Focus

Attention now shifts to the company’s rights issue, priced at Rs 27 per share. The offer closes on October 30, and shareholders can sell or transfer their rights entitlement in the market until October 26. Ola Electric had approval to raise up to Rs 1,500 crore, of which Rs 780 crore came in through a qualified institutional placement in June.

The board cleared the rights issue on September 28 and filed the draft paper the same day. For existing investors, the key question is whether fresh funds can steady the business before the brokerage’s cautious call plays out.