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Electric two-wheeler manufacturer Ather Energy made its stock market debut on Tuesday, listing at Rs 328 per share, a 2.2% premium over its IPO price.
At the opening bell, the Sensex fell 240 points to 80,557, while the Nifty50 declined 78.6 points to 24,382.
On May 5, Ather Energy’s shares were trading at a premium of Rs 7 in the grey market, indicating a 2.18% gain over the IPO’s upper price band of Rs 321.
Ather’s Rs 2,626 crore IPO, open from April 28 to April 30, saw a lukewarm response from investors. By the close on April 30, the Qualified Institutional Buyers (QIB) portion was subscribed just 1.7 times, while Non-Institutional Investors (NIIs) took up only 66% of their allotted quota. Retail investors, who often fuel IPO momentum, showed relatively higher interest with a subscription rate of 1.78 times.
According to the DRHP, Tiger Global has made an 8.3X return of the partial shares sold in the offer for sale (OFS), while Caladium Investment and National Investment and Infrastructure clocked 57% and 75% respectively.
In the first nine months of FY25, the company sold 1,08,000 vehicles, generating revenue of Rs 1,578.9 crore. However, it posted a loss of Rs 579.6 crore during the same period. For the full fiscal year ending March 2024, the company reported revenue of Rs 1,753 crore with a loss of Rs 1,062 crore.
As of 10:18 AM today, Ather Energy shares stood at Rs 326.05, with a total market capitalization of Rs 12,144 crore or $1.48 billion.
The inconsequential premium on day 1 is a pointer to the tough road ahead for Ather shareholders, as the issue has been priced fine, despite the valuation haircut. One thing one does know is that there should be no surprises on the upside from Ather in the next few quarters, as the firm will not be rushed into hasty decisions. A true long term investment where one will hope to see steady improvement in the fundamentals of the firm on the back of the immense effort it has put behind R&D and building a reputation.
The stock price will test investor patience, especially if the markets swoon again due to Trump or other factors. Dipping below issue price, as has happened with Ola Electric will not be a shock, except that one hopes investors have learnt their lesson from the Ola debacle.
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