Ather Energy IPO: Stock falls over 8% after muted listing; investors lose ₹782 cr

Electric two-wheeler manufacturer Ather Energy lost over ₹782 crore of its value on its first day of trading, after making a muted start on Dalal Street on Tuesday. The market capitalisation of the pure-play EV company dropped to ₹11,174 crore against around ₹11,956 crore before the listing.

In the choppy trade, Ather Energy shares ended 8.54% lower at ₹300 per share on the NSE, over the initial public offering (IPO) price of ₹321 apiece. On the BSE, the stock settled 7.22% lower at ₹302.50 per share.

Early today, the EV stock debuted at ₹326.05 on the BSE, a premium of 1.57% over the issue price, while it listed at ₹328 on the NSE, up 2.18% over the IPO price.

In the opening trade, Ather share price jumped 3.7% to hit an intraday high of ₹333, before slipping into negative territory, touching a day’s low of ₹299.10, down 6.8% on the NSE. On the volume front, 150 lakh shares worth ₹478 crore changing hands over the counter on the NSE.

The listing of Ather Energy IPO was below Dalal Street expectations as the auto stock was commanding grey market premium (GMP) of ₹14 in the unlisted market, indicating listing price to be around ₹335, up 4.36%.

Issue “aggressively priced” compared to peer OLA Electric

“As expected, we see a flat listing, which was justified, as the issue was aggressively priced, especially when benchmarked against peer OLA Electric,” says Prashanth Tapse, Senior VP (Research), Mehta Equities.

He opined that the electric two-wheeler (EV 2W) segment remains highly competitive and capital-intensive, with most players, including market leaders, struggling to achieve sustainable profitability and raising concern with new investors.

“Given these facts and risks, we recommend a “HOLD” only to risk taking investors, who are comfortable with short- to medium-term volatility while conservative investors may still prefer a wait-and-watch, allowing the stock to settle with some reasonable valuation post-listing,” Tapse said.

He further stated that EV industry being in high growth – high competition and high cash burning segment, it is expected to see high volatility both in business as well as in the price action. Hence, investors should be aware of volatility and risk in short to medium term investing, he said.

IPO received muted response

Despite having a first-mover advantage, Tarun Mehta and Swapnil Jain co-promoted EV maker received a tepid response for their ₹2,981 crore IPO. The issue, which opened for subscription between April 28-30, was subscribed 1.5 times on the final day of bidding after qualified institutional buyers (QIBs) came to rescue on the last day of bidding. Investors applied for 7.67 crore equity shares worth ₹2,463.65 crore as compared to the offer size of 5.11 crore shares.

The portion reserved for QIBs was booked 1.76 times as they started bidding on the final day of the offer. The IPO received decent support from retail investors, as the quota reserved for them subscribed 1.89%, while that of non-institutional investor (NII) was booked just 69%. Meanwhile, employee’s quota received maximum bidding of 5.43 times. 

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