Will Ather Energy Experience a Quiet Stock Market Debut?
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Synopsis
In a surprising turn, Ather Energy's upcoming stock market debut in India is expected to be less than thrilling, as grey market indicators reveal a low premium. Investors are showing caution, raising questions about the electric vehicle company's future potential.
Key Takeaways
- Ather Energy's stock market debut is anticipated to be subdued.
- The grey market premium indicates limited investor enthusiasm.
- The IPO was subscribed 1.43 times overall.
- Strong participation was noted in the employee quota.
- The funds raised will support significant expansion initiatives.
Mumbai, May 5 (NationPress) Ather Energy is poised to debut on Indian stock exchanges this Tuesday; however, indications from the grey market suggest a subdued entry for the electric vehicle company.
The electric two-wheeler manufacturer based in Bengaluru is witnessing only a slight premium before its listing, indicating a lack of enthusiasm from potential investors.
As of Monday, the grey market premium (GMP) for Ather shares was merely Rs 7 above the IPO’s upper price band of Rs 321, reflecting a possible upside of just around 2.18 percent, as per data from InvestorGain.com.
This represents a significant decline from previous expectations, with the GMP decreasing steadily leading up to the listing date.
The IPO, which raised Rs 2,981 crore, garnered a rather tepid response from investors across diverse categories, being subscribed 1.43 times overall.
Retail investors showed more interest, subscribing 1.78 times, while qualified institutional buyers (QIBs) subscribed 1.70 times, and non-institutional investors (NIIs) subscribed only 0.66 times.
In contrast, the employee quota witnessed strong engagement, with a subscription rate of 5.43 times.
Supported by global investors, including Tiger Global, Ather Energy’s IPO was open for subscription from April 28 to April 30.
The allotment of shares was completed on May 3, with shares credited to investors’ accounts on Monday.
Refunds have been processed for those who were not allotted shares. The capital raised through the IPO will underpin Ather’s expansion initiatives.
About Rs 927.2 crore is earmarked for setting up a new EV manufacturing facility in Maharashtra.
Additionally, the company plans to invest Rs 50 crore in research and development, Rs 300 crore in marketing and brand promotion, and Rs 40 crore for debt repayment.
Despite being a pioneer in India's EV sector, Ather has not turned a profit since its founding in 2013 by Tarun Mehta and Swapnil Jain.
According to its red herring prospectus (RHP), the company has reported losses every financial year, with no definitive timeline for achieving operational efficiency or profitability.
Point of View
It's crucial to emphasize that Ather Energy's IPO reflects a cautious sentiment among investors in the electric vehicle sector. While the company's innovative approach positions it well for future growth, the lukewarm market reception and ongoing financial losses are significant concerns that need to be addressed for sustainable success.
NationPress
23/07/2025
Frequently Asked Questions
What is the grey market premium for Ather Energy?
As of Monday, the grey market premium (GMP) for Ather shares is Rs 7, indicating a potential upside of around 2.18%.
How well was Ather Energy's IPO subscribed?
The IPO was subscribed 1.43 times overall, with retail investors subscribing 1.78 times and qualified institutional buyers (QIBs) at 1.70 times.
What are the company's plans for the funds raised?
The raised funds will support expansion efforts, with Rs 927.2 crore allocated for a new manufacturing plant in Maharashtra.
Has Ather Energy been profitable since its inception?
No, Ather Energy has reported losses every financial year since its establishment in 2013.
What investments is Ather making post-IPO?
Ather plans to invest Rs 50 crore in R&D, Rs 300 crore in marketing, and Rs 40 crore in debt repayment.
