Ather Energy Limited's Initial Public Offering (IPO) made its debut on the stock exchanges on May 6, 2025, following a bidding period that spanned from April 28 to April 30, 2025. The IPO, which was a significant event for the electric vehicle (EV) sector, raised a total of ₹2,981.06 crores, comprising a fresh issue of 8.18 crore shares and an offer for sale of 1.11 crore shares. The price band for the shares was set between ₹304 and ₹321.
On its listing day, Ather Energy shares opened at ₹328 per share on the National Stock Exchange (NSE), reflecting a premium of ₹7, or 2.18 percent, over its upper issue price. Meanwhile, on the Bombay Stock Exchange (BSE), the shares listed at ₹326.05, which is a premium of ₹5.05, or 1.57 percent, compared to the issue price. This performance, while positive, fell short of expectations set by the grey market, where shares were trading around ₹335 prior to the listing, suggesting a potential opening price of around ₹335.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, commented on the listing, stating that it was justified given the aggressive pricing of the IPO, especially when compared to its peer, Ola Electric. He noted that the electric two-wheeler segment is highly competitive and capital-intensive, with many players, including market leaders, struggling to achieve sustainable profitability. Tapse advised investors to consider a "HOLD" rating for those willing to take risks, while conservative investors might prefer to wait for a more favorable valuation post-listing.
The Ather Energy IPO was the first mainboard issue of the financial year 2025-26. Despite a muted response from investors, the IPO was oversubscribed by 1.43 times overall. Retail investors showed notable interest, subscribing 1.78 times the portion reserved for them, while qualified institutional buyers (QIBs) subscribed 1.70 times. However, non-institutional investors (NIIs) only managed to subscribe 0.66 times their allocation. The employee quota was significantly oversubscribed at 5.43 times.
Ather Energy plans to utilize the proceeds from the fresh issue to fund capital expenditure related to the establishment of an electric two-wheeler factory in Maharashtra, India. Additionally, the funds will be allocated for the repayment and pre-payment of certain borrowings, investment in research and development, marketing initiatives, and general corporate purposes.
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy is a Bengaluru-based company that designs and develops electric two-wheelers and their associated components, including batteries and software. The company has gained recognition for its flagship models, the Ather 450 series and the Ather Rizta series, catering to different market segments. In the fiscal year 2024, Ather Energy sold over 1.09 lakh electric two-wheelers, positioning itself as the third-largest electric scooter brand by volume, according to a CRISIL report.
The IPO's book-running lead managers included Axis Capital, HSBC Securities & Capital Markets, JM Financial, and Nomura Financial Advisory and Securities (India), while Link Intime India served as the registrar for the offering.
As of May 5, 2025, the grey market premium (GMP) for Ather Energy's IPO was reported at ₹7, suggesting an estimated listing price of ₹328. However, it's important to note that the GMP is based on unauthenticated market-related news and should be taken with caution. Investors are encouraged to conduct their own research before making any investment decisions.
In summary, Ather Energy's IPO marks a significant step in the company's growth trajectory within the electric vehicle industry, despite a somewhat tepid market reception. Investors and analysts alike will be closely monitoring the company's performance in the coming months, particularly as it seeks to establish itself further in a rapidly evolving and competitive landscape.
