Ather Energy IPO opens today: GMP falls flat; should you subscribe?

Ather Energy IPO opens for public subscription today: Check issue size, price band, GMP, brokerage reviews, allotment date, listing date and more

Ather Energy IPO grey market premium (GMP): The grey market premium (GMP) for the unlisted shares of electric two-wheeler (E2W) maker Ather Energy has plunged sharply ahead of the opening of its initial public offering (IPO) scheduled for today, April 28, 2025.  Sources tracking unofficial market activities revealed that the company’s shares are trading flat at around ₹321 apiece (upper end of the IPO price) in the grey market, reflecting a nil GMP.  This marks a notable decline from the ₹20 premium (approximately 6 per cent) seen on Wednesday, April 23, when Ather Energy announced its IPO price band.  

That said, the brokerages still remain upbeat on the public offering and have broadly recommended subscribing to the Ather Energy IPO for long-term outlook and listing gains.

 

 

Before we delve into the brokerages' calls, here are key details of Ather Energy IPO outlined in its Red Herring Prospectus (RHP):

 

Ather Energy IPO issue size

Ather Energy IPO is a bookbuilding issue of ₹2,981.06 crore. The public offering comprises a fresh issue of 81.80 million equity shares and an offer for sale (OFS) with promoters and shareholders divesting up to 11.05 million equity shares of the company. From the promoters' group, Tarun Sanjay Mehta and Swapnil Babanlal Jain are participating in the OFS. Caladium Investment Pte, National Investment and Infrastructure Fund II, Internet Fund III Pte. Ltd. are among other shareholders who are taking part in the OFS.

 

Ather Energy has announced that it has raised ₹1,340.03 crore from anchor investors on the bidding concluded on April 25. 

Ather Energy IPO price band, lot size 

Ather Energy IPO is available at a price band of ₹304 - ₹321 per share, and the lot size is 46 shares. Accordingly, investors can bid for a minimum of 46 shares and in multiples thereof.

 

At the upper price band, a retail investor will require a minimum of ₹14,766 to bid for one lot of 46 shares, and ₹1,91,958 to bid for a maximum of 13 lots or 598 shares. 

Ather Energy IPO allotment date, listing date

The three-day subscription window to bid for the Ather Energy IPO is likely to conclude on April 30, 2025. Following the closing of the subscription window, the basis of allotment of the Ather Energy IPO shares is slated to be finalized tentatively on May 2, 2025.

 

Shares of Ather Energy are expected to list on the NSE and BSE tentatively on May 6, 2025.   ALSO READ | Ahead of listing, Ather Energy bullish on driving past rivals in e2W market

Ather Energy IPO objective

Ather Energy, in its RHP, has said that it will not receive any proceeds from the OFS. "Each of the Selling Shareholders shall be entitled to its respective portion of the proceeds of the Offer for Sale after deducting its proportion of the Offer expenses and relevant taxes thereon," reads the RHP.

 

Ather Energy, however, intends to use the proceeds from the fresh issue of the public offering for capital expenditure to be incurred for the establishment of an E2W factory in Maharashtra, India. The company will further use the proceeds for repayment/pre-payment, in full or part, of certain borrowings availed, investment in research and development, expenditure towards marketing initiatives, and general corporate purposes.

Ather Energy IPO registrar, lead managers

Link Intime India serves as the registrar for the public offering. The book-running lead managers include Axis Capital, HSBC Securities & Capital Markets, JM Financial, and Nomura Financial Advisory and Securities (India).

Should you subscribe to the Ather Energy IPO? 

Arihant Capital - Subscribe for listing gains

 

Analysts at Arihant Capital have assigned the 'Subscribe for listing gain' rating on the Ather Energy IPO. They believe that Ather Energy is strongly positioned in India’s fast-growing electric two-wheeler market, backed by its early-mover advantage, premium product positioning, and a robust in-house R&D and technology ecosystem. "The company’s recent launches, like the Ather Rizta, have helped expand its customer base. Its upcoming Factory 3.0 will significantly increase production capacity from 420,000 to 1.42 million units by FY27, while ongoing cost-cutting and R&D investments are expected to improve margins further," wrote the analysts in a research note.

 

While the reduction of government subsidies has been a challenge, they said, the company has managed to improve its profitability metrics and reduce subsidy dependence. "At the upper band of ₹ 321, the issue is valued at an EV/sales ratio of 8x, based on a 9MFY25 Sales of ₹ 1578.9 crore. We are recommending a 'Subscribe for listing gain' rating for this issue."  ALSO READ | Ather Energy garners Rs 1,340 cr from anchor investors ahead of IPO 

Bajaj Broking - Subscribe for long-term perspective

Analysts at Bajaj Broking have recommended subscribing to the Ather Energy IPO with a long-term perspective. Ather Energy is in the process of expanding its manufacturing capacity by setting up a new unit in Maharashtra. "Despite its growth initiatives, the company has been consistently posting losses and carries significant accumulated losses. Its financial performance has resulted in a negative Price-to-Earnings (P/E) ratio, and its borrowings stood at over ₹1,121 crore as of December 31, 2024, which is a point of concern," wrote the analysts in their report. 

 

However, the company, they said, benefits from strong parentage, which remains its key strength. Considering its current financials, this appears to be a long-term investment story, and therefore, only well-informed investors with surplus funds and a long-term perspective may consider investing moderately. 

Ventura Securities - Subscribe for listing gains

Brokerage firm Ventura Securities, in its research note, has recommended subscribing to the Ather Energy IPO for listing gains. "Its premium focus, Ather Grid, and R&D-driven innovation differentiate it from competitors. The company is going through major capex with its Ather Factory 3.0 (which will have a 10 lakh unit capacity by mid-FY26). This comes despite challenges such as subsidy cuts and low-capacity utilisation," wrote the brokerages in its report. 

Geojit - Subscribe with a long-term outlook

Analysts at Geojit have recommended that investors subscribe with a long-term outlook and a high-risk appetite. At the upper price band of ₹321, Ather’s EV/Sales ratio of 7.1x (FY24) appears expensive. However, as a pioneer in the E2W segment, the company is in a strong growth phase with robust R&D and new technological platforms. "Despite current profitability challenges and valuation concerns, we recommend a 'Subscribe' rating for high-risk investors with a long-term outlook," wrote the analysts in their report.

Deven Choksey Research - Avoid

Brokerage firm Deven Choksey Research has assigned an 'Avoid' rating and believes that it can be bought at an attractive valuation in the secondary market. Ather Energy, according to the brokerage, is well-placed to capitalise on growth in the E2W industry, led by a strong DNA of innovation and engineering, but the path to profitability seems long and full of challenges.

 

"Although Ather 'Rizta' and the to-be-launched 'EL platform' are expected to play a pivotal role in solidifying its market position, the company’s future depends on the ramp-up of vehicle volumes from existing and new product launches, gross margin improvement led by further cost reduction, and the ability to withstand competitive pressures from both E2W and ICE 2W OEMs. Ather is currently offered at an EV/Sales valuation of 6x, which appears overvalued to us," said the brokerage in its report.

About Ather Energy

Founded in 2013, Ather Energy is a pure-play EV company, engaged in the design, development, and sale of E2Ws, complemented by an integrated ecosystem comprising in-house developed software, charging infrastructure, and smart accessories. The company operates as a vertically integrated EV manufacturer with a focus on product and technology development. The company's product ecosystem includes Ather Grid, a public fast-charging network for two-wheelers, and Atherstack, a proprietary software platform with 64 connected features as of July 2024.