Ather Energy, a leader in the Indian electric two-wheeler (E2W) market, is launching its Initial Public Offering (IPO) in 2025 with a massive offering of ₹2,980.76 Crores. The IPO comprises a fresh issue of 818.06 Lakh shares worth ₹2,626.00 Crores and an offer for sale of 110.51 Lakh shares totaling ₹354.76 Crores. The share price band for this IPO has been set at ₹304 to ₹321 per share, and the shares will be listed on both the BSE and NSE. The subscription period is from April 28, 2025, to April 30, 2025, with the allotment set to be finalized on May 2, 2025, and shares listed on May 6, 2025.

IPO Structure and Financial Details

Ather Energy has a market capitalization of ₹11,955 Crores at the upper IPO price of ₹321 per share. The IPO has a lot size of 46 shares, meaning retail investors need to invest a minimum of ₹14,766. High-Net-Worth Individuals (HNIs) can invest in a minimum of 14 lots (644 shares) amounting to ₹2,06,724.

The Grey Market Premium (GMP) for the Ather Energy IPO is currently ₹0, reflecting little to no expected listing gains. The IPO's Book Running Lead Managers include top firms like Axis Capital Limited, HSBC Securities, and others, with MUFG Intime India Private Limited acting as the registrar for the issue.

Ather Energy IPO Live Subscription Status

As of April 30, 2025, the Ather Energy IPO has been subscribed 0.34 times on its final day of the subscription period, indicating moderate demand for the shares.

Anchor Investors and Pre-IPO Investments

Ather Energy has successfully raised ₹1,340.03 Crores from anchor investors at ₹321 per share. This investment was made before the public subscription opened, and the shares were allocated to qualified institutional buyers (QIBs).

Objectives of the Ather Energy IPO

The company plans to use the proceeds from the IPO for multiple purposes:

• ₹9,272.00 Million for capital expenditure to build a new electric two-wheeler factory in Maharashtra, India.

• ₹400.00 Million to repay certain borrowings.

• ₹7,500.00 Million will be allocated to research and development.

• ₹3,000.00 Million is earmarked for marketing initiatives to increase brand visibility and market share.

• The remaining funds will be used for general corporate purposes.

Financial Performance and Metrics

Ather Energy has experienced significant financial growth over the years, with revenues of ₹16,174 Million in FY24. However, the company has posted consistent losses, with a Profit After Tax (PAT) of ₹-5,779 Million for FY24. This loss trend has continued from FY22 through FY24, reflecting the challenges in scaling its operations in the competitive electric vehicle space.

The Pre-issue EPS stands at ₹-47.00, and the Post-issue EPS is projected at ₹-28.45, indicating that the company is still in its growth phase and struggling to reach profitability. Despite this, Ather Energy's valuation at an IPO price of ₹321 suggests potential long-term growth, especially as the Indian electric vehicle market is expected to expand rapidly.

Investment Consideration

While Ather Energy is a leader in the Indian electric two-wheeler market, its negative earnings and the lack of any expected listing gains in the Grey Market Premium indicate that it may not be an ideal choice for short-term investors looking for immediate returns. The company’s financial metrics, including negative P/E ratios and low return on equity, suggest that the stock is fully priced.

Given the absence of immediate listing gains and the high risk associated with investing in an unprofitable company, we recommend avoiding the Ather Energy IPO for short-term or speculative investments. Long-term investors with a strong belief in the growth of electric vehicles and Ather Energy’s potential market leadership may still find value in the company, but they should be prepared for volatility.

Conclusion

The Ather Energy IPO offers a unique opportunity to invest in a pioneering company in the Indian electric vehicle space. However, given its financial struggles, lack of immediate listing gains, and high risk associated with its unprofitable nature, we recommend avoiding the Ather Energy IPO for short-term gains. Investors should carefully consider the long-term prospects of the company before making a decision.

For further updates on the subscription status and allotment results, stay tuned and ensure you check the official registrar website on May 2, 2025 to view your allotment status.

The Upcoming IPOs in this week and coming weeks are  Wagons Learning, Srigee DLM, Manoj Jewellers.

The Current active IPO are Kenrik Industries,Arunaya Organics, Ather Energy, Iware Supplychain Services.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.