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The Ather Energy Initial Public Offering (IPO) commenced on April 28th, marking a significant event in the electric vehicle (EV) sector. The IPO, aiming to raise Rs 2,981 crore, witnessed a subscription of 13 percent within the first four hours of trading on its initial day. This lukewarm initial response doesn't necessarily indicate a lack of interest, but rather a cautious approach from investors amidst prevailing market conditions and a thorough evaluation of the company's prospects. Prior to the public offering, Ather Energy successfully secured Rs 1,340 crore from anchor investors, demonstrating a foundational level of confidence from institutional players. The pricing band for the IPO is set between Rs 304 and Rs 321 per share, offering a range for potential investors to participate in the company's growth story. The IPO represents the first mainboard public issue of the current financial year (2025-26), underscoring its importance as a bellwether for the investment climate and the broader EV market. A breakdown of subscription interest reveals that retail individual investors (RIIs) have shown considerable enthusiasm, subscribing to 48 percent of the allocated shares. Non-institutional investors (NIIs) have bid for 14 percent, indicating a more measured approach from this investor segment. The allocation structure reserves 75 percent of the issue for qualified institutional buyers (QIBs), 15 percent for NIIs, and the remaining 10 percent for retail investors, adhering to standard regulatory guidelines and catering to diverse investor profiles. The funds raised through the IPO are earmarked for two primary objectives: the establishment of a new electric two-wheeler manufacturing facility in Maharashtra and the reduction of existing debt. This strategic allocation of capital highlights Ather Energy's focus on expanding its production capacity to meet growing demand and strengthening its financial position. The IPO comprises a fresh issue of equity shares worth Rs 2,626 crore and an offer-for-sale (OFS) of 1.1 crore equity shares by promoters and other shareholders. The OFS component allows existing investors to partially liquidate their holdings, while the fresh issue injects new capital into the company. The performance of Ather Energy's IPO is closely watched, not only for its own merits but also as an indicator of investor sentiment towards the EV sector as a whole. The success of this IPO could pave the way for other EV companies to tap into the capital markets and fuel their expansion plans. The grey market premium (GMP), an unofficial indicator of expected listing gains, remains flat for Ather Energy's IPO. A flat GMP suggests a lack of strong speculative interest and indicates that the IPO may list at or near its issue price. This does not necessarily mean the IPO is unattractive, but rather that investors are taking a more conservative approach. The EV market is rapidly evolving, driven by factors such as increasing environmental awareness, government incentives, and technological advancements. Ather Energy has emerged as a prominent player in the Indian electric two-wheeler market, known for its innovative products and focus on user experience. The company's electric scooters are equipped with advanced features such as smart dashboards, connected technology, and fast charging capabilities. Ather Energy has also invested in building a charging infrastructure network across major cities in India, addressing a key challenge for EV adoption. The company faces competition from established players in the two-wheeler market, as well as from other emerging EV manufacturers. The success of Ather Energy's IPO will depend on its ability to execute its growth strategy, maintain its competitive edge, and navigate the evolving regulatory landscape. The company's long-term prospects are tied to the overall growth of the EV market and its ability to capture a significant share of this market. The IPO is being managed by a consortium of investment banks, who are responsible for marketing the issue to investors and ensuring its successful completion. The investment banks have conducted roadshows and investor presentations to generate interest in the IPO and highlight Ather Energy's strengths and growth potential. The IPO is open to both domestic and international investors, allowing for broad participation in the offering. Investors are advised to carefully review the IPO prospectus and consider their own investment objectives and risk tolerance before making a decision to invest. The prospectus provides detailed information about Ather Energy's business, financial performance, and risk factors. The disclaimer at the end of the article emphasizes the importance of consulting with certified financial experts before making any investment decisions. This underscores the need for individual investors to conduct their own due diligence and seek professional advice before investing in the IPO. Ather Energy's IPO is the second electric two-wheeler company looking to go public after Ola Electric Mobility floated its Rs 6,145-crore IPO in August of the previous year. Ola Electric's IPO had a fresh issue of up to Rs 5,500 crore and an OFS of up to 8.5 crore equity shares. The presence of another major player in the EV space going public underscores the growing maturity and investor interest in this sector. The performance of both Ather Energy's and Ola Electric's IPOs will be closely watched as barometers of the overall health and potential of the Indian EV market. The funds raised through these IPOs will enable these companies to further invest in research and development, expand their manufacturing capacity, and strengthen their distribution networks, ultimately contributing to the growth of the EV ecosystem in India.
Source: Ather Energy IPO sees 13% subscription in first four hours on Day 1; GMP remains flat