Ather Energy rekindles IPO buzz after 2-month lull; here's what the GMP may be hinting at
Electric scooter maker
Ather Energy
's entry into the primary market has stirred fresh investor interest, with its grey market premium (GMP) offering early clues ahead of the company's Rs 2,981 crore initial public offering. The GMP, currently hovering at Rs 7 per share, suggests a modest upside over the upper end of the IPO price band, set between Rs 304 and Rs 321.
The electric scooter maker, which filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi) on April 22, will open its IPO for subscription from April 28 to April 30. Anchor allotments are slated for April 25.
Issue structure and shareholder plans
The IPO comprises a fresh equity raise of Rs 2,626 crore and an offer for sale (OFS) of 1.1 crore shares.
Promoters Tarun Sanjay and Swapnil Babanla, alongside select corporate shareholders, will pare part of their stakes via the OFS. HeroMoto Corp, Ather's largest shareholder with around 40% stake, will not divest any shares in this issue.
GMP trend
While the GMP currently indicates an estimated listing price of Rs 328 per share—a 2.18% premium—market observers point to a softening trend. The premium has dipped from highs of Rs 17 in recent sessions, signaling cautious sentiment as the offer date approaches.
Use of funds and expansion plans
Proceeds from the IPO will be channeled toward setting up a new electric two-wheeler manufacturing facility in Maharashtra, debt repayment, R&D investments, marketing, and general corporate purposes.
Product portfolio and market presence
Ather Energy designs, develops, and assembles electric scooters and battery packs in-house, with two key product lines—the Ather 450 and Ather Rizta. The company, which holds an 11% market share in India's electric two-wheeler space, relies heavily on its southern markets, contributing 68% of its FY24 volumes.
Growth potential and sector outlook
New product launches like the Rizta are expected to expand Ather's reach beyond its premium segment, though challenges remain in scaling distribution and fending off competition from larger OEMs.
India, the world's largest motorised two-wheeler market with 18.4 million units sold in FY24, continues to present significant growth opportunities, especially as EV adoption accelerates.
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