Ather Energy’s IPO Launch: A Mixed Bag for Investors
Ather Energy, a notable player in India’s electric vehicle (EV) market, made its initial public offering (IPO) debut on May 6, 2025. Unfortunately, this much-anticipated event didn’t quite live up to the hype, with shares listing at a mere 2% premium over the issue price of ₹321. On the National Stock Exchange (NSE), Ather shares opened at ₹328, while the Bombay Stock Exchange (BSE) saw them debut at ₹326.05.
Initial Market Response
Despite positive sentiment leading up to the launch, Ather Energy’s stock fell short of expectations. The grey market had predicted a stronger performance, with Ather Energy’s grey market premium (GMP) sitting at ₹14, suggesting a potential opening price of ₹335. However, as trading progressed, Ather shares reversed their initial gains. By 10:20 AM, the NSE reported a drop of 1.33% to ₹323.65, while the BSE saw a decline of 0.8% to ₹323.45.
Ather Energy IPO Insights
The subscription period for Ather Energy’s IPO ran from April 28 to April 30, garnering interest primarily from retail investors and qualified institutional buyers. The IPO was 1.50 times oversubscribed, with varying levels of interest across different investor categories:
- Qualified Institutional Buyers (QIB): 1.76x
- Non-Institutional Investors (NII): 0.69x
- Retail Investors: 1.89x
- Employee Portion: 5.43x
The company successfully raised ₹2,981.06 crore at the upper end of its price band, consisting of a fresh share sale of ₹2,626.30 crore and an additional ₹354.76 crore from an offer for sale by promoters.
Fund Allocation and Future Plans
Ather Energy aims to utilize the proceeds from its IPO for various strategic initiatives, including:
- Establishing a new electric two-wheeler (E2W) factory in Maharashtra
- Repaying corporate borrowings
- Investing in research and development (R&D)
- Funding marketing efforts and other corporate expenses
About Ather Energy
Founded in 2013 by Tarun Sanjay Mehta and Swapnil Babanlal Jain, Ather Energy has carved out a significant niche in the EV sector. With an 11.5% market share as of FY24, the company ranks as the third-largest player in the electric two-wheeler segment. However, it’s important to note that Ather has faced financial challenges, consistently reporting losses since its inception.
In FY24 alone, Ather’s pre-tax losses reached ₹1,059.7 crore, a stark increase from ₹864.5 crore in FY23 and ₹344.1 crore in FY22. Revenue growth has also stagnated, with FY24 figures declining to ₹1,753.8 crore from ₹1,780.9 crore the previous year.
Conclusion
While Ather Energy’s IPO marks a significant milestone for the company, the lukewarm market response raises questions about its future profitability and operational efficiency. Investors will be keenly watching the company’s next moves as it navigates the challenges of the competitive EV landscape. For more on the evolving electric vehicle market, check out our comprehensive articles on EV trends and market analysis.
