Ather Energy share price rebounds post poor listing, trades above IPO price. What should allottees do?
Ather Energy shares had a modest launch on the stock exchanges on Monday. On the NSE, the shares opened at ₹ 328, reflecting a 2.18% increase from the issue price of ₹ 321. Meanwhile, on the BSE, the shares began trading at ₹ 326.05 each, which is a rise of 1.57% compared to the issue price.
On its first day of trading, Ather Energy shares closed at ₹ 300 on the NSE, representing a 6.54% decrease from the IPO price of ₹ 321, and at ₹ 302.50 on the BSE, which is a 5.76% decline.
Arun Kejriwal, the founder of Kejriwal Research and Investment Services, expressed that the Ather Energy IPO listing was underwhelming, particularly considering the excitement exhibited by retail investors. This reflects the general sentiment surrounding Ather Energy. Consequently, if investors possess shares from the IPO, it is recommended to establish a stop loss in the range of ₹ 293-295. Assess whether to continue holding the investment or to sell and wait for the company's results for the March quarter.
Further, Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund explained that Ather Energy's muted listing highlights the sector's challenges and the need for patience from investors.
While its premium positioning and steady revenue growth are positives, near-term volatility is expected as the company invests heavily in capacity and market expansion. Ola's dominance and market cap strength will continue to cast a shadow on Ather's valuation until Ather can decisively break out with its own growth and profitability story, added Gulati.
Ather Energy IPO included a fresh issuance of equity shares worth ₹ 2,626 crore, along with an offer-for-sale (OFS) of 1.1 crore equity shares from promoters and other stakeholders. The OFS featured existing investors like National Investment and Infrastructure Fund II, Internet Fund III Pte. Ltd., IITM Incubation Cell, IITMS Rural Technology and Business Incubator, as well as promoters Tarun Sanjay Mehta and Swapnil Babanlal Jain, who will be selling their shares.
Of the total funds raised through the IPO, Ather intended to use ₹ 927.2 crore to build an electric two-wheeler manufacturing plant in Maharashtra, ₹ 40 crore to repay debts, ₹ 750 crore for investments in research and development, and ₹ 300 crore for marketing initiatives. These funds are planned to be utilised during the fiscal years 2026 to 2028.
Axis Capital Limited, HSBC Securities & Capital Markets Pvt Ltd, JM Financial Limited, and Nomura Financial Advisory and Securities (India) Pvt Ltd are acting as the book running lead managers for Ather Energy's IPO. Link Intime India Private Ltd is serving as the registrar for this offering.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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