Olectra Greentech States No Official Order Cancellation Notice Received by SPV with Evey Trans

27 May 2025 , 09:32 PM

Shares of Olectra Greentech Ltd fell as much as 7% on Tuesday, 27 May, after Maharashtra’s transport minister Pratap Sarnaik instructed officials to scrap the tender awarded to the company for not adhering to delivery timelines for electric buses.

The Minister in a social media post on “X” said the company, which he did not name, did not produce any of the 5,150 electric buses it has under lease and lease-purchase which was extended to them for the procurement of 1,000 buses by May 22.

The tender was cancelled following a meeting at the Maharashtra State Road Transport Corporation (MSRTC) headquarters on Monday evening and on grounds of non-performance by the company.

The contract under process is the ₹10,000 crore contract for the supply of 5,150 electric buses, which was awarded on 7 July 2023 to a consortium headed by Evey Trans Pvt. Ltd. and Olectra Greentech in a 12-year deal.

Olectra Greentech has said that the project is being implemented by an SPV in which it has a 1% stake, but Evey Trans Pvt. is the winning bidder with a 99% interest. The company said the SPV has not so far received any official cancellation order and is still going ahead with the project as per the original contract.

According to the contract, Evey was to purchase electric buses from Olectra and supply to MSRTC over 24 months i.e up to July 2025, and Olectra was to provide service during the life of the contract.

The public announcement of the LoI was made in July 2023 and Olectra shares rose 20%, and more than doubled its price to reach a historical peak of ₹2,200 in February 2024. But it has since recovered almost 40% from those peaks.

For the January–March 2025 quarter, the company posted a 58% year-on-year increase in revenue, while net profit doubled, amid the controversy. EBITDA was up 70% YoY and margins expanded 100bps this reflects operational strength amidst order execution issues.

The Company will be holding an analyst call on Wednesday, May 28, 2014 at 4:30 pm to review its quarterly results and explain the situation as it pertains to the MSRTC order. MEGA Engineering and Infrastructure Ltd (MEIL) continues to be the promoter of Olectra Greentech, with a 50 per cent stake in the March 2025 quarter.

Though the institutional holding is low, retail holding is high with more than 5.2 lakh small shareholders holding together 36.05% stake in the company as of March-end. The company and government’s next communication post contract cancellation and its likely impact on Olectra’s further order book and earnings trajectory remains the key monitorable by the street.