Ather Energy’s Initial Public Offering (IPO) has generated considerable buzz as it opened to investors, showcasing the growing demand for electric vehicles in India. With a fresh share issuance valued at ₹2,626 crore and an additional offer for sale amounting to ₹354.8 crore, this IPO is poised to make waves in the market. As of now, the bidding has seen an impressive subscription rate, reflecting strong investor interest.
Ather Energy IPO Subscription Highlights
On the third day of bidding, Ather Energy’s IPO was 1.43 times subscribed, with the following breakdown:
- Qualified Institutional Buyers: 1.70 times
- Retail Investors: 1.78 times
- Non-Institutional Investors: 0.66 times
- Employee Portion: 5.43 times
This robust participation indicates a positive market sentiment towards the electric two-wheeler manufacturer.
Grey Market Premium and Listing Expectations
As of April 30, the grey market premium (GMP) for Ather Energy’s IPO was reported at ₹1. This suggests that shares could debut at around ₹322, reflecting a modest 0.31% gain over the IPO price range of ₹304 to ₹321. While the GMP provides some insight, it’s important to remember that it is based on market speculation and not an official pricing mechanism.
Investment Plans and Financial Overview
Ather Energy aims to allocate ₹927.2 crore for capital expenditures, primarily for its electric two-wheeler factory in Maharashtra. Additional funds will be directed towards:
- ₹40 crore for loan repayments
- ₹750 crore for research and development
- ₹300 crore for marketing initiatives
In recent financial reports, Ather has shown a 28.30% increase in revenue, reaching ₹1,578.9 crore in the first nine months of FY 2025 compared to ₹1,230.4 crore the previous year. However, it faced a net profit decline of 25.60%, resulting in a loss before tax of ₹1,059.7 crore.
Risks and Challenges Ahead
Investors should be aware of several key risks associated with Ather Energy:
- Supply Chain Dependence: The company relies heavily on external suppliers for most of its electric two-wheeler components, aside from its in-house battery production. Any disruptions could significantly impact operations.
- Financial Vulnerability: Having experienced losses since inception, Ather’s path to profitability remains uncertain. The company must navigate a challenging market landscape where demand for electric two-wheelers is still developing.
- Regional Concentration: Ather’s sales are predominantly concentrated in South India, which exposes it to risks related to natural disasters, regulatory changes, and regional instability.
Overview of Ather Energy’s Market Position
Ather Energy is not just an electric two-wheeler manufacturer but also provides a comprehensive product ecosystem, which includes software, smart accessories, and charging infrastructure. Their focus on in-house design and assembly positions them uniquely within the competitive landscape, alongside established players like Hero MotoCorp, Bajaj Auto, and Ola Electric.
Investing in Ather Energy’s IPO could present an opportunity in the burgeoning electric vehicle sector, but potential investors are advised to conduct thorough research and consider market risks before proceeding.
In summary, Ather Energy’s IPO reflects the accelerating shift towards electric mobility in India, but like any investment, it comes with its share of challenges. As always, potential investors should consult with financial advisors to make informed decisions.
