Ather Energy IPO: Should you subscribe or not?
Ather Energy Limited's much-anticipated initial public offering (IPO) opened for subscription on Monday, breaking a two-month dry spell for mainboard listings. The public issue will remain open for bidding until April 30.The IPO is a book-built offer worth Rs 2,980.76 crore, comprising a fresh issue of 8.18 crore equity shares valued at Rs 2,626.30 crore and an offer for sale (OFS) of 1.11 crore shares aggregating Rs 354.76 crore.advertisementThe price band for the issue has been fixed at Rs 304 to Rs 321 per share. Retail investors can bid for a minimum of one lot, consisting of 46 shares, requiring an investment of at least Rs 13,984. However, to boost allotment chances in case of heavy oversubscription, investors are advised to bid at the cut-off price, taking the application amount to approximately Rs 14,766.
Small non-institutional investors (sNIIs) will need to apply for a minimum of 14 lots (644 shares), amounting to Rs 2,06,724, while big non-institutional investors (bNIIs) will need to bid for at least 68 lots (3,128 shares), translating to a minimum investment of Rs 10,04,088.Founded in 2013, Ather Energy designs, manufactures, and sells electric two-wheelers (E2Ws) along with battery packs, charging infrastructure, and connected software solutions. The company operates through a vertically integrated model and places a strong emphasis on product innovation and technology development.SHOULD YOU SUBSCRIBE?advertisementOpinions among brokerages are divided. Bajaj Broking Research advised caution, highlighting the company's persistent losses and accumulated debt.'Ather is expanding aggressively, including setting up a new facility in Maharashtra. However, it continues to post losses, reflected in its negative price-to-earnings ratio. Borrowings, standing at over Rs 1,121 crore as of December 31, 2024, are also a concern," Bajaj Broking noted.They added that only well-informed investors with a high-risk appetite and a long-term investment horizon should consider subscribing — and even then, moderately.Ventura Securities, however, took a more optimistic view. "We recommend subscribing for potential listing gains," Ventura said, pointing to Ather's premium product positioning, extensive charging network (Ather Grid), and innovation-driven R&D efforts.They also noted that despite challenges like subsidy cuts and low capacity utilisation, Ather's upcoming mega factory — Ather Factory 3.0, which will boost capacity to 1 million units by mid-FY26 — could be a game changer.Gaurav Garg from the Lemonn Markets Desk said that aggressive, long-term investors could consider subscribing only if they have a high-risk appetite, given the overhang of consistent losses and fierce competition. "'Subscribe only if you have a high-risk appetite as losses and competition are big overhangs," he said.advertisementHowever, he advised conservative investors to avoid or watch from the sidelines, given the absence of profitability in the near future and the company's aggressive pricing strategy. 'Avoid or watch from the sidelines. No profitability in sight and aggressive pricing.'WHAT DOES GMP INDICATE?As of April 28, 2025, the grey market premium (GMP) for Ather Energy's IPO stood at Rs 0. With the upper end of the price band at Rs 321, the estimated listing price is expected to mirror the issue price, suggesting no immediate listing gains based on the latest GMP trends.Allotment for the IPO is likely to be finalised on May 2, with shares expected to list on BSE and NSE on May 6, 2025.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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