Ather Energy IPO: issue sails through after QIP push; check latest GMP

The initial public offering (IPO) of Ather Energy managed to sail through on the third and last day of the bidding process thanks to the participation from the institutional investors. The issue was subscribed only 16 per cent on day one and ended the second day of bidding with 30 per cent of bidding.

Ather Energy is selling its shares in the price band of Rs 304-321 apiece. Investors can apply for a minimum of 46 shares and its multiples thereafter. It is looking to raise Rs 2,981 crore via IPO, which included a fresh share sale of Rs 2,626 crore and offer-for-sale (OFS) of up to 1,10,51,746 equity shares by its promoters and existing shareholders.

According to the data, the investors made bids for 5,90,96,108 equity shares, or 1.11 times, compared to the 5,33,63,160 equity shares offered for the subscription by 1.55 pm on Wednesday, April 30, 2025. The three-day bidding for the issue, which opened on Monday, April 28, shall conclude today.

The allocation for retail investors was subscribed 1.49 times, while the portion reserved for qualified institutional bidders (QIBs) saw a subscription of 1.35 times. Portions allocated towards employees were booked 4.37 times. However, the quota set aside for non-institutional investors (NIIs) was booked only 35 per cent as of the same time.

Incorporated in 2013, Bengaluru-based Ather Energy is a pure-play electric two-wheeler (E2W) company engaged in the design, development, and in-house assembly of electric scooters, battery packs, charging infrastructure, and supporting software systems. It operates as a vertically integrated EV manufacturer with a focus on product and technology development.

The grey market premium (GMP) of Ather Energy has seen a sharp correction amid the rising stock market volatility and muted bidding for the issue. Last heard, the company was commanding a premium of merely Rs 1-2 per share in the unofficial market, suggesting a flat listing for the investors.

Brokerage firms mostly have a mixed view on this issue. They suggest avoiding the issue citing its rich valuations, loss making nature of the business, high debt and rising competition in the EV space. However, others suggest subscribing to it on a long-term basis citing its expansion plans, rising penetration of EVs and profitability plans in the coming quarters.

Ather 'Rizta' and to be launched 'EL platform' are expected to play a pivotal role in solidifying its market position, the company’s future depends on ramp-up of vehicle volumes from existing and new product launches, gross margin improvement led by further cost reduction, and the ability to withstand competitive pressures from both E2W and ICE 2W OEMs, said DR Choksey Finserv.

Ather’s EV/Sales ratio of 7.1 times for FY24 appears expensive. However, as a pioneer in the E2W segment, the company is in a strong growth phase with robust R&D and new technological platforms, said Geojit Financial Services. "Despite current profitability challenges and valuation concerns, we recommend a 'subscribe' rating for high-risk investors for long-term," it said.

Ather Energy has reserved 1,00,000 equity shares for its eligible employees who will get a discount of Rs 30 per share during the IPO. 75 per cent of the net issue has been reserved for qualified institutional bidders, while 15 per cent of the net offer shall go to the non-institutional bidders. Only 10 per cent of shares from the net issue shall be allocated to the retail investors.

SMIFS has recommend to subscribe to the issue as a high risk - high return long term investment, with the E2W industry in India poised for more than 100 per cent CAGR over the next 5-7 years and the enhanced addressable market beyond south India - which contributes to 33 per cent of all India 2W sales, coupled with stronger R&D capabilities and higher capacities.

For the nine months ended on December 31, 2024, Ather Energy reported a net loss of Rs 577.9 crore, with a revenue of Rs 1,617.4 crore. The company's net loss stood at Rs 1,059.7 crore with a revenue of Rs 1,789.1 crore in the financial year 2023-24. Its total borrowing stood at Rs 1,121.6 crore as of December 31, 2024.

JM Financial, Axis Capital, HSBC Securities & Capital Markets, Nomura Financial Advisory and Securities (India) are the book running lead managers of the Ather Energy IPO, while Link Intime India is the registrar for the issue. Shares of Ather Energy shall be listed on both BSE and NSE with May 6 as the tentative date of listing, with allotment likely to be out by Friday, May 02.