Ather Energy is one of the leading pioneers in the Indian electric two-wheeler (E2W) market. The company is known for manufacturing electric scooters and providing an entire ecosystem around them, including software, charging infrastructure, and smart accessories. All of these products are designed and conceptualized in India. Ather Energy is now set to launch its Initial Public Offering (IPO) to raise funds for expanding its manufacturing capabilities and research and development efforts.

Key Details of Ather Energy IPO:

• IPO Size and Structure:
  Ather Energy is raising a total of ₹2,980.76 crores, which includes a Fresh Issue of ₹2,626 crores from 818.06 lakh shares and an Offer for Sale of ₹354.76 crores from 110.51 lakh shares.

• Price Band:
  The IPO price band has been set between ₹304 and ₹321 per equity share. The lot size for retail investors is 46 shares, with a minimum investment requirement of ₹14,766.

• Subscription Period:
  The IPO opens for subscription on April 28, 2025, and closes on April 30, 2025. The allotment is expected to be finalized on May 2, 2025, and the tentative listing date for the shares on BSE & NSE is May 6, 2025.

• Objectives of the IPO:
  The net proceeds from the IPO will be utilized for several strategic purposes:

  • Capital expenditure for establishing a new E2W manufacturing facility in Maharashtra (₹9,272 crores).

  • Repayment of borrowings (₹400 crores).

  • Investment in research and development (₹7,500 crores).

  • Marketing expenses (₹3,000 crores).

  • General corporate purposes.

Grey Market Premium (GMP):

Currently, the Grey Market Premium (GMP) of Ather Energy IPO stands at ₹0. This suggests that there is no anticipated listing gain based on the current demand and supply dynamics in the unorganized market. GMP is an unregulated indicator and should not be the sole basis for investment decisions.

Subscription and Allotment Details:

• IPO Subscription Status:
  As of the last day of subscription on April 30, 2025, the Ather Energy IPO was subscribed 1.43 times. This indicates a positive response from investors but not a huge oversubscription. Investors can check the live subscription status on the BSE website for real-time updates.

• Anchor Investor Investment:
  The company has successfully raised ₹1,340.03 crores from anchor investors at the upper end of the price band (₹321 per share). A total of 4,17,45,576 shares were allocated to anchor investors. These shares will be a part of the Qualified Institutional Buyers (QIBs) portion during the IPO.

Financial Performance:

Ather Energy has shown significant revenue growth over the past few years:

• Revenue from operations for FY 2024 was ₹16,174 million, compared to ₹17,891 million in FY 2023.

• The company has incurred significant EBITDA losses over the years, with the FY 2024 EBITDA loss at ₹3,700 million.

• Profit after Tax (PAT) for FY 2024 stands at a loss of ₹5,779 million.

Despite these losses, Ather Energy is making strong investments in its infrastructure and research, aiming for long-term growth in the expanding electric vehicle market in India.

IPO Valuation and Risks:

At the IPO price of ₹321 per share, Ather Energy’s market capitalization stands at ₹11,955 crores. The company has a negative Price-to-Earnings (P/E) ratio before the issue (-6.83x), and the post-issue P/E ratio stands at -11.28x, which is considerably below the industry average of 39x.

Given the negative earnings and lack of immediate listing gains reflected by the GMP, we suggest that investors carefully consider these metrics. The company's focus on long-term development in the electric vehicle sector does present a growth potential, but the financials indicate it may take longer to turn a profit.

Should You Apply?

Based on the financial performance and valuation metrics, Ather Energy’s IPO is priced quite aggressively. Given the lack of expected listing gains and the company's ongoing losses, we recommend avoiding the IPO for short-term listing gains. However, for long-term investors with a strong belief in the growth of India’s electric vehicle market, Ather Energy could be a potential stock to monitor.

Investors interested in electric vehicles and the growing Indian EV sector might find the long-term prospects attractive, but they should be cautious about the company's short-term financial health and market conditions.

The Upcoming IPOs in this week and coming weeks are Virtual Galaxy Infotech.

The Current active IPO are Srigee DLM, Manoj Jewellers, Wagons Learning, Kenrik Industries.

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