Ather Energy Share Price: Hold or Sell After Weak IPO Listing?

Ather Energy stock listed with a 6.54% drop on NSE. Should investors hold or exit? Read expert opinions, risk analysis, and future outlook.

Ather Energy shares had an underwhelming debut on the stock exchange. On the very first day of its listing on May 6, the stock plunged over 6 percent, dropping to 300 rupees, a 6.54 percent decline from its IPO price of 321 rupees. On the listing day the company had a market cap of roughly 12,110 crore, which then dropped to 11,173 crore, exactly 18 percent of roughly 12,110 crore by the close of the market.

IPO Didn’t Invite A Whole Lot of Investors

The IPO was only subscribed 1.43 times increasing its valuation to 400 crores. Price band was set between 304-321 per share. Market analysts believe that the IPO price was a bit on the higher side. In any case, in comparison to rival Ola Electric, Ather’s shares looked expensive. And even Ola’s IPO, which was initiated in August of last year, performed poorly post listing.

High Risk Investors Can Hold For Longer Period

Only Ather Energy investors who can afford to take bold risks and tougher financial blows stand to gain from this decision, explained Prashanth Tapse, Senior Vice President of Mehta Equities. Investors willing to commit for the short to medium term should be willing to endure the volatility. Meanwhile he advised low risk investors not to spend their time trying to make these kinds of decisions. While pole position in the electric two wheeler manufacturing tube is shifting rapidly, he added, they also face intense competition.

Profits May Take Time

Electric vehicle companies typically require significant capital, which means profits can be slow. During the waiting period, a lot of investors lose patience. According to Gaurav Garg of Lemon Markets, Ather’s IPO didn’t stir too much excitement. The retail investor tranche was covered only 1.89 times, while the HNIs barely reached 0.69% subscription.

Investors are Being Cautious

Expert commentary suggests that the lackluster response to Ather Energy’s IPO and their dismal debut indicate investors are taking a back seat. They don’t seem willing to touch high-valuation stocks. Regardless, the markets have eased up quite a bit from the pullback in April; confidence in the Indian markets is still shaky. If Ather Energy shares continue to slide, their valuation will be appealing later down the line. That scenario provides the opportunity for value investors looking for a bargain.

Disclaimer: All comments and recommendations within this article are as provided by market analysts and brokerage firms. Their views do not represent the views of this platform and its editorial team. Readers are encouraged to approach an independent financial advisor before assessing any investment options.