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Ather Energy, an electric scooter manufacturer, has successfully closed its $352 million Initial Public Offering (IPO) on the final day of bidding. This comes after a somewhat sluggish start, attributed to market volatility that seemingly dampened investor enthusiasm earlier in the week. The IPO, which seeks to value Ather Energy at approximately $1.4 billion, represents a significant event, standing as India's third-largest IPO of the year. The company managed to garner bids totaling 24.13 billion rupees (approximately $286 million), surpassing the initial offering of 17.13 billion rupees. This achievement followed a prior successful raising of 13.40 billion rupees from prominent 'anchor' investors, including the Abu Dhabi Investment Authority and Temasek, demonstrating initial confidence from institutional players. A breakdown of the bidding reveals that Qualified Institutional Buyers (QIBs), who had 54% of the shares reserved for them in the public offering, led the charge with bids valued at 15.6 billion rupees. Retail investors also participated significantly, submitting bids for 5.31 billion rupees of shares. A notable aspect of the IPO was the decision by Hero MotoCorp, a leading motorcycle manufacturer and Ather Energy's largest shareholder, not to sell any of its existing shares. This could be interpreted as a sign of continued faith in Ather's long-term prospects, at least from its major backer. The success of Ather Energy's IPO is being closely watched as a critical indicator of the overall health and sentiment of the Indian IPO market, which has experienced a slowdown in momentum amidst broader market declines and global economic uncertainties. The market, while having been the second-largest globally in terms of proceeds last year, has seen a decrease of approximately 15% in 2025, according to data from LSEG. This decline is attributed to a combination of factors, including global market volatility and adjustments in U.S. trade tariffs, which have prompted companies to reconsider their listing strategies to mitigate the risk of weak demand or outright IPO failures. The analysis and investor outlook surrounding the Ather Energy IPO provides valuable insight into the current dynamics and future direction of the Indian electric vehicle (EV) market. India's EV market has experienced substantial growth in recent years, driven by increasing environmental awareness, government incentives, and rising fuel costs. The successful completion of Ather Energy's IPO underscores investor confidence in the long-term potential of the EV sector, particularly in the two-wheeler segment. The company's focus on innovative product design, advanced technology, and a comprehensive charging infrastructure has positioned it as a key player in the rapidly expanding EV ecosystem. However, the IPO also highlights the challenges and risks associated with investing in emerging EV companies. Market volatility, competition from established players, and evolving regulatory landscapes can significantly impact the performance of EV stocks. Therefore, investors need to carefully assess the company's financials, growth prospects, and competitive advantages before making any investment decisions. Despite these challenges, the Ather Energy IPO is expected to have a positive impact on the broader Indian EV market. The successful listing will not only provide Ather Energy with the necessary capital to expand its production capacity and invest in research and development but also boost investor confidence in the overall EV sector. This, in turn, could attract more foreign and domestic investments into the Indian EV market, accelerating its growth and development.
Further complicating the investment landscape are recent geopolitical tensions, specifically the escalating tensions between India and Pakistan. According to Aditya Kondawar, Partner & Vice President at Complete Circle Capital, these tensions have negatively impacted investor appetite for the Ather IPO, further highlighting the sensitivity of the market to external events. On the other hand, analysts at brokerage Geojit offered a more nuanced perspective, acknowledging that Ather's IPO 'appeared expensive' but still recommending it to high-risk investors who are seeking long-term gains. This recommendation is based on Ather's position as a 'pioneer' in the Indian electric scooter market and its commitment to robust research and development. Indeed, Ather Energy was among the first companies to introduce e-scooters to the Indian market back in 2018. However, it has since faced increasing competition from larger rivals such as Ola Electric, TVS Motor, and Bajaj Auto, who have leveraged aggressive discounting strategies and wider distribution networks to drive their sales volumes. Despite this competition, Ather Energy has managed to maintain a significant presence in the market by focusing on product innovation, charging infrastructure, and a premium brand image. The company's success in securing funding and completing its IPO demonstrates its ability to navigate the challenges of the Indian EV market and attract investor interest. The funds raised from the IPO, totaling 26.26 billion rupees from the sale of new shares, are earmarked for strategic investments in the company's future growth. A significant portion of these funds will be allocated to the construction of a third manufacturing facility, which will help Ather Energy increase its production capacity and meet the growing demand for its e-scooters. Additionally, a substantial portion of the IPO proceeds will be invested in research and development, enabling Ather Energy to continue innovating and developing cutting-edge EV technologies. This commitment to innovation is crucial for maintaining a competitive edge in the rapidly evolving EV market. The decision by Ather Energy to invest in a third manufacturing facility reflects its confidence in the long-term growth potential of the Indian EV market. The new facility will not only increase production capacity but also create new jobs and contribute to the overall economic development of the region. Furthermore, the investment in research and development will enable Ather Energy to develop more efficient, sustainable, and advanced EV technologies, further solidifying its position as a leader in the Indian EV market.
The dynamics of the Indian IPO market, particularly in the context of the EV sector, are influenced by a multitude of factors ranging from global economic trends to local policy initiatives. The fluctuating demand for EV investments, especially those of newer companies like Ather, indicates the necessity for such companies to highlight sustainable business models and clear paths towards profitability in order to attract and maintain investor confidence. Furthermore, the ability of Ather to compete with established players in the automotive industry will likely depend on its capacity to expand its distribution networks, enhance charging infrastructure, and continue to innovate in battery technology and vehicle design. The overall sentiment surrounding EV adoption in India also plays a critical role. Government support in the form of subsidies and tax incentives are crucial for making EVs more affordable and accessible to a wider range of consumers. Public awareness campaigns and infrastructure development, such as the establishment of more charging stations, are also essential for promoting EV adoption and overcoming consumer hesitation. The challenges faced by Ather Energy in its IPO process reflect the broader uncertainties and opportunities in the Indian EV market. Despite these hurdles, the successful closure of the IPO signifies the growing importance of the EV sector in India's economic landscape. The company's commitment to innovation and its strategic investments in production capacity and research and development position it for long-term success in the rapidly evolving EV market. The Indian EV market is poised for significant growth in the coming years, driven by increasing environmental awareness, government support, and technological advancements. As the market matures, it is expected to attract more domestic and foreign investments, leading to greater competition and innovation. Ather Energy, with its strong brand image, innovative products, and strategic partnerships, is well-positioned to capitalize on this growth and become a leading player in the Indian EV market. The successful IPO is a testament to the company's vision, execution, and ability to navigate the challenges of the Indian business environment. In conclusion, Ather Energy's IPO represents a significant milestone for both the company and the Indian EV market. The successful closure of the IPO, despite market volatility and geopolitical tensions, demonstrates investor confidence in the long-term potential of the EV sector in India. The funds raised from the IPO will enable Ather Energy to expand its production capacity, invest in research and development, and further solidify its position as a leader in the Indian EV market. The Indian EV market is poised for significant growth in the coming years, and Ather Energy is well-positioned to capitalize on this growth and contribute to a more sustainable transportation future.
Source: Ather Energy's $352-mn IPO crosses finish line on final day of bidding