ASK Automotive Makes Stock Market Debut With 8% Listing Gains; Should You Hold, Buy Or Sell?

ASK Automotive IPO Listing: Shares of ASK Automotive Ltd on Wednesday listed with a premium of more than 8 per cent against the issue price of Rs 282. The stock made its debut at Rs 304.90, registering a gain of 8.12 per cent from the issue price on the BSE. It further rallied 10.54 per cent to Rs 311.75.

On the NSE, it listed at Rs 303.30, a jump of 7.55 per cent. The company’s market valuation stood at Rs 6,022.71 crore.

Prashanth Tapse, research analyst and senior vice-president (research) of Mehta Equities, said, “ASK automotive listing was in line with street expectations. We believe after the listing, there would be decent demand for the shares as its IPO had received overwhelming response from all kinds of investors, especially from QIB’s 142 times. We also believe ASK can act as a proxy play for the growth in the Indian automobile sector.”

He added that ASK Automotive gives allotted investors a long-term opportunity to hold and raid the growth in the automobile sector, hence recommending all allotted investors “hold for the long term”. Those who failed to get allotments can accumulate on the listing day for holding it for healthy long-term returns as markets always reward a player who has high visibility and growth potential, Tapse said.

Shivani Nyati, head of wealth at Swastika Investmart Ltd, said, “ASK Automotive Ltd has debuted at Rs 303.30, i.e., 7.40 per cent above its issue price. It is a leading player with more than 50 per cent market share as a break shoe and advanced braking systems manufacturer. The company shares strong relations with all the top two-wheeler manufacturers in the country. It has a robust production model and a technology- and innovation-based manufacturing process. Financially, the company has shown strong growth in its top-line numbers, while its profitability has also been decent.”

Nyati said the IPO is coming at a PE valuation of 45.63x, which is reasonably priced. So, allottees who applied for the public offering for listing premium are advised to “maintain their stop loss at 290 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock with the given stop loss”.

ASK Automotive IPO

The initial public offering (IPO) of ASK Automotive was subscribed 51.14 times on the last day of subscription on Thursday, with heavy participation coming in from institutional buyers. The Rs 833.91 crore initial share sale had a price band of Rs 268-282 per equity share.

Gurugram-based ASK Automotive is one of the largest manufacturers of brake-shoe and advanced braking systems for two-wheelers in India with a market share of about 50 per cent in the 2022 fiscal. The firm supplies safety systems and critical engineering solutions with in-house designing, developing, and manufacturing capabilities.

The company has clients, including TVS Motor Company Ltd, Hero MotoCorp, Greaves Electric Mobility and Bajaj Auto. Equity markets were closed on Tuesday on account of Diwali Balipratipada.