Olectra Greentech Share Price Slumps After Maharashtra Cancels E-Bus Tender

Olectra Greentech Share Price Slumps as Maharashtra Minister Cancels E-Bus Tender

Mumbai, May 27, 2025 —
Electric mobility player Olectra Greentech Ltd., a key name in India’s electric bus manufacturing space, faced a sharp sell-off today as the company’s stock plummeted over 8% intraday. The trigger? A significant blow came from Maharashtra’s Transport Minister, who unexpectedly cancelled the state's mega electric bus (e-bus) tender, citing irregularities and lack of transparency in the process.

The news spooked investors and cast a cloud over what was seen as a big-ticket contract that could have boosted Olectra’s order book and revenue pipeline substantially.

What Happened? The Trigger for the Crash

On Monday evening, Maharashtra Transport Minister Shambhuraj Desai made a public statement scrapping the ambitious electric bus procurement plan, claiming that the process had procedural inconsistencies. This included doubts about the single-vendor dominance and alleged lack of competition in the bidding process.

Although the Minister didn’t name Olectra directly, market participants were quick to react since Olectra was widely considered a frontrunner for the tender—believed to be worth over ₹3,600 crore.

Immediate Market Reaction

Olectra Greentech shares opened gap-down on Tuesday, reflecting the negative sentiment. The stock dropped by over 8% to an intraday low of ₹964, wiping out significant market cap within hours of trading. Despite an attempt to recover slightly in the second half, the damage was done. Investor confidence was clearly rattled.

Here’s how the numbers looked:

• Previous Close: ₹1,050

• Intraday Low: ₹964

• Loss in Market Cap: Nearly ₹750 crore (approx.)

The Cancelled Tender: Why It Mattered

The cancelled e-bus tender was not just another state order—it was seen as a game-changer for Olectra, aligning with India’s broader green mobility goals. The tender involved over 5,000 electric buses, which could have significantly boosted Olectra’s market share and earnings visibility.

Analysts had projected that winning this contract would:

• Improve revenue projections for FY26 and FY27

• Strengthen Olectra’s order book beyond ₹10,000 crore

• Enable better economies of scale in manufacturing

• Enhance investor confidence in EV infrastructure growth

With the tender now off the table, those optimistic estimates are being revisited—and the stock price reflects that.

Why Was the Tender Cancelled? Political & Procedural Reasons

Transport Minister Desai pointed to “lack of transparency” and “irregular tender conditions” as the prime reasons behind scrapping the deal. In a statement, he said:

“The process lacked competitive participation. Certain clauses seemed restrictive and skewed in favor of specific players. We will relaunch the tender with clearer norms.”

This move is seen by political analysts as an attempt to clean up state-level procurement practices ahead of upcoming civic elections. However, the timing could not have been worse for companies like Olectra.

Olectra’s Response: Still Hopeful

Olectra Greentech, in its initial comment, stated that it “respects the state government’s decision” and remains committed to providing best-in-class e-mobility solutions. The company also mentioned it will “review the revised tender when reissued” and participate again if deemed viable.

This neutral and composed response is being seen as an attempt to manage investor sentiment and avoid long-term damage to its brand and reputation.

Impact on the EV Sector

The cancellation may have short-term consequences for investor sentiment across India’s EV sector, especially for companies dependent on large government orders. Other listed players like JBM Auto and Tata Motors also saw intraday weakness.

The move might:

• Slow the pace of electric bus adoption in Maharashtra

• Lead to delays in similar tenders in other states

• Force companies to diversify their client base beyond government contracts

Technical Breakdown: Charts Show Weakness

From a technical analysis standpoint, Olectra Greentech broke its 50-day moving average and is now testing long-term support at ₹950. If this level fails to hold, analysts fear a further downside toward ₹900 or even ₹875.

• RSI (Relative Strength Index): 41 (approaching oversold territory)

• MACD: Bearish crossover confirmed

• Volume Spike: 2x average daily volume—indicating strong selling

Technical traders are advised to stay cautious unless the stock sees a bounce-back above ₹1,000 with strong volumes.

Investor Outlook: What Should You Do Now?

If you're a long-term investor in Olectra Greentech, today’s development is undoubtedly concerning—but not necessarily a reason to panic. The fundamentals of the company remain strong, and India’s EV roadmap remains intact. However, the volatility could persist for a few sessions.

Here are key takeaways for investors:

• Short-Term: Expect weakness and range-bound movement

• Medium-Term: Wait for clarity on the revised tender or new contracts

• Long-Term: Continue monitoring EV policy changes and Olectra’s execution capabilities

Analysts suggest trimming exposure only if the stock breaks ₹875 decisively and does not recover within the next two weeks.

What’s Next for Olectra and the EV Policy?

The Maharashtra government has said it will reissue a fresh, “more transparent” tender in the coming weeks. Olectra, being an established player with strong technical capabilities and successful deliveries in cities like Hyderabad and Surat, remains a likely contender.

The big question now is: Will the new tender favor multiple vendors? And if yes, can Olectra remain competitive in a multi-party bidding war?

Only time will tell. For now, the stock will likely remain under pressure until more clarity emerges.

Broader Market Context: Is This an Overreaction?

Some market veterans believe the 8% fall may be an overreaction, particularly if the tender is only temporarily delayed. The broader EV adoption trend in India remains intact, driven by both central and state governments.

From subsidies under FAME-II to increased private sector interest, the EV space still has strong long-term tailwinds.

A Setback, Not a Shutdown

The cancellation of Maharashtra’s e-bus tender is a clear short-term negative for Olectra Greentech, no doubt. But it doesn’t change the broader growth story for the company—or India’s electric mobility ambitions.

What investors must now watch is how quickly the new tender is issued, whether Olectra can stay competitive, and how it mitigates future dependency on state contracts.

For now, the road may be a bit bumpy, but the destination—green, sustainable mobility—remains firmly on track.