Staff Writer
Mumbai: In a dramatic development with far-reaching implications for India’s electric vehicle (EV) ambitions, the Maharashtra government has called for the cancellation of a massive ₹10,000 crore electric bus contract, citing repeated delays and non-fulfilment of delivery commitments by the contractor. The move threatens to derail one of the country’s most high-profile EV public transport initiatives and has sent shockwaves through financial markets.
Maharashtra Transport Minister Pratap Sarnaik announced the decision through a strongly worded post on X (formerly Twitter), where he highlighted the contractor’s failure to deliver even a single bus under a revised delivery timeline. Although the minister refrained from explicitly naming the company, his statement clearly referred to the supplier of 5,150 electric buses intended for the Maharashtra State Road Transport Corporation (MSRTC), pointing to Olectra Greentech Ltd. and its consortium partner Evey Trans Pvt. Ltd. as the parties involved.
According to Sarnaik, the consortium had agreed under a revised agreement to deliver 1,000 electric buses by May 22, 2025. However, the company failed to meet even this modified milestone. “Since the company has failed to deliver even one bus under the revised timeline, doubts remain about their ability to fulfill the order in the future,” Sarnaik wrote. “Therefore, it was decided that the tender agreement with the company should be cancelled.”
This announcement came shortly after a high-level review meeting held at the MSRTC headquarters in Mumbai. Sources familiar with the proceedings revealed that senior officials had already made a preliminary decision to terminate the contract owing to the supplier’s non-compliance with agreed timelines. The original agreement, signed in July 2023, mandated the supply of 5,150 electric buses within a 24-month window, with final delivery due by July 2025. It also included a 12-year maintenance contract, making the deal one of the most significant public-private collaborations in India’s transport electrification drive.
Following the minister’s statement, shares of Olectra Greentech Ltd. plunged sharply during pre-open trade on Tuesday morning, falling nearly 14% to hit an intraday low of ₹1,160 on the National Stock Exchange. Although the stock rebounded slightly to ₹1,266 by 9:30 AM, it still marked a steep 6% drop compared to the previous session’s close of ₹1,348.10, erasing all of Monday’s 4.2% gain.
The contract at the center of the controversy was awarded to a consortium led by Hyderabad-based Evey Trans Pvt. Ltd., with Olectra Greentech acting as a technical partner. The Letter of Intent (LoI) was issued in July 2023 for the supply of the electric buses, seen as a game-changing project that could significantly reduce the state’s carbon emissions and transform public transportation in Maharashtra.
In response to the unfolding crisis, Olectra Greentech issued a clarification distancing itself from direct contractual obligations. The company emphasized that the tender was being executed through a Special Purpose Vehicle (SPV) jointly created with Evey Trans Pvt. Ltd. Olectra holds only a 1% stake in the SPV, while Evey Trans is the lead bidder with a commanding 99% share. “As of now, there is no formal communication from the authorities regarding any cancellation of the said tender,” the company stated. It reiterated that the SPV, not Olectra Greentech Ltd. directly, is contractually responsible for project execution.
Despite the tender controversy, Olectra reported strong financial results for the quarter ending March 2025. On Monday, the company posted a 58% year-on-year rise in revenue and a doubling of net profit. Its EBITDA grew by 70%, with a 100 basis-point improvement in operating margins. To underscore its financial stability, the board declared a final dividend of ₹0.40 per share. Yet these robust earnings were largely overshadowed by the uncertainty surrounding the MSRTC order, which has long been seen as a cornerstone of the company’s future growth trajectory.
Olectra’s stock, which had seen a meteoric rise following the announcement of the MSRTC order in mid-2023, has been on a downward spiral since hitting a record high of over ₹2,200 in February 2024. Currently, the stock trades nearly 40% below its peak. While it has gained 13% over the past month, it is still down 9.2% for 2025 and has shed more than 25% over the past year.
Backed by infrastructure giant Megha Engineering and Infrastructure Ltd. (MEIL), which holds a 50% stake in the company as of March 2025, Olectra Greentech has a significant retail investor base. Data indicates that more than 5.2 lakh small shareholders, each holding investments of up to ₹2 lakh, collectively own 36.05% of the company’s equity. The recent uncertainty has understandably rattled investor confidence.
The spotlight will now shift to Olectra’s upcoming quarterly earnings call, scheduled for Wednesday, May 28 at 4:30 PM. Market participants and analysts are expected to press the company’s leadership for clarity on the status of the MSRTC contract, the likelihood of a formal cancellation, and any contingency plans in place to mitigate the potential loss of such a large-scale order.
Until the Maharashtra government issues an official termination notice, the future of one of India’s most ambitious electric bus projects hangs in the balance. For now, the mood among investors remains cautious, as Olectra Greentech navigates a pivotal moment in its corporate journey.