Ather Energy, a prominent player in India’s electric two-wheeler segment, has initiated its Initial Public Offering (IPO) on April 28, 2025. The IPO is slated to close on April 30, 2025. Priced between ₹304 and ₹321 per share, the company aims to raise approximately ₹2,981 crore through a combination of fresh equity issuance and an offer for sale (OFS). Notably, the IPO has garnered significant attention, with anchor investors contributing ₹1,340 crore prior to the public offering.
As of midday on the first day of bidding, the IPO witnessed a subscription of 7%, with the retail segment subscribing 34%, non-institutional investors at 2%, and the employee quota nearing full subscription at 99%. However, the grey market premium (GMP) for Ather Energy’s shares stood at ₹0, indicating a cautious market sentiment.
Strategic Utilization of IPO Proceeds
The funds raised are earmarked for several strategic initiatives. A significant portion, ₹927 crore, is allocated for establishing a new manufacturing facility in Maharashtra. Additionally, ₹750 crore is designated for research and development, ₹300 crore for marketing efforts, and ₹40 crore for debt repayment. These investments are poised to enhance Ather’s production capacity and technological capabilities, positioning the company for sustained growth in the competitive electric vehicle market.
Company Performance and Market Position
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy has established itself as a pioneer in the electric two-wheeler industry. The company’s product lineup includes the performance-oriented Ather 450 series and the family-friendly Ather Rizta series, introduced in April 2024. The Rizta model, featuring innovations such as traction control and voice command integration, has contributed to a 28% increase in revenue over nine months ending December 2024.
Despite these advancements, Ather faces stiff competition from established players like Ola Electric, TVS Motor, and Bajaj Auto. The company’s valuation at the upper IPO price band reflects a 44% reduction from its earlier target, now standing at approximately $1.4 billion. This adjustment underscores the challenges in the current market environment and the need for strategic positioning.
Expert Opinions and Investment Considerations
Analysts present a mixed outlook on the IPO. Arihant Capital recommends subscribing for listing gains, citing Ather’s strong market position and technological edge. Ventura Securities echoes this sentiment, highlighting the company’s premium focus and innovative approach. Conversely, HEM Securities advises caution, suggesting that investors wait for the listing to assess market reactions, given the current valuation and market conditions.
To Buy or Not to Buy…
Ather Energy’s IPO represents a significant milestone in its growth trajectory, offering investors an opportunity to participate in the evolving electric mobility sector. While the company’s strategic initiatives and product innovations position it favorably, market dynamics and competitive pressures necessitate a careful evaluation by potential investors. As the subscription period progresses, investor response will provide further insights into the market’s confidence in Ather’s future prospects.
