Ather Energy will use the IPO proceeds for funding its new factory in the western state of Maharashtra, as well as for research and development, repayment of debt, marketing, and general corporate purposes.

Ather Energy's shares fell 3.3% in their market debut on Tuesday, reversing slight gains from the open, on worries over the company's ability to weather intensifying competition in the electric two-wheeler industry.

Analysts believe Ather Energy IPO was aggressively priced, especially when benchmarked against peer OLA Electric. However, continued downward pressure could make it more attractive to value-conscious investors.