Ather Energy Rebounds Over 6% After a Muted Market Debut
Ather Energy, a notable player in India's burgeoning electric vehicle (EV) market, concluded its debut trading session on domestic stock exchanges with a 5.76% decline from its initial public offering (IPO) price. However, the company’s share is now trading in green ₹320.15, increasing 5.90%.
Listing Details
The shares of the Bengaluru-based EV manufacturer made a modest entry, listing at ₹326.05 on the BSE, a slight premium of 1.57% over the issue price of ₹321. On the NSE, the stock opened slightly higher at ₹328, representing a 2.18% premium to the ₹321 IPO price. However, this initial uptick was short-lived. The share price soon fell below the issue price, touching an intraday low of ₹300 on the BSE, nearly 8% below its listing price. Despite an intraday high of ₹332.90, the stock failed to sustain momentum. Ather Energy shares closed at ₹302.50 on the BSE, marking a 5.76% drop compared to the IPO price. This closing price was also 7.22% below its BSE listing price of ₹326.05. The company's market valuation decreased to ₹11,266.90 crore ($1.33 Bn) by the end of the trading day, down 6% from its IPO valuation of ₹11,956 crore ($1.42 Bn).
IPO Response
Ather Energy's IPO aimed to raise ₹2,980 crore. The offer, with a price band of ₹304-₹321 per share, consisted of a fresh issue worth ₹2,626 crore and an offer for sale (OFS) of ₹354 crore by existing shareholders. The IPO saw a subdued overall subscription of 1.43 times by its closing date on April 30. While the portions for retail investors and qualified institutional buyers (QIBs) were oversubscribed at 1.78x and 1.70x respectively, the non-institutional investor (NII) portion was only 66% subscribed, indicating limited interest from that segment. The company had earlier secured ₹1,340 crore from anchor investors.
Company Financials and Market Position
Founded in 2013 by IIT-Madras alumni, Ather Energy operates as a vertically integrated EV company, handling the design, development, and assembly of electric scooters, battery packs, charging infrastructure, and software. It is known for its tech-forward models like the Ather 450 and Ather Rizta and manages the Ather Grid fast-charging network.
Financially, Ather is in an investment phase. For FY24, it reported a significant net loss of ₹1,059 crore on revenue of ₹1,754 crore. The company's EBITDA margin stood at -36%, indicating that profitability is yet to be achieved. Analysts attribute this to high R&D and distribution expenses, as well as price competition. Despite the losses, Ather sold over 1 lakh electric scooters in FY24 (over 1.25 Lakh in 2024), positioning it among the top four electric scooter manufacturers in India, though trailing some competitors in unit sales.
Analyst Perspective
The stock's flat market debut was attributed to aggressive IPO pricing compared to peers like Ola Electric, amid concerns over steep valuation. The competitive and capital-intensive nature of the electric two-wheeler sector added to investor caution. Analysts advised risk-tolerant investors to hold, while recommending conservative participants adopt a wait-and-watch approach until valuations stabilise.
Future Outlook
Ather Energy is the second EV company in India to debut on the stock exchanges. The company plans to use the IPO proceeds to finance its new factory in Maharashtra, repay debt, and invest in R&D and marketing. The planned Factory 3.0 is expected to increase its total annual production capacity significantly to 1.4 million units. The stock's future performance will largely depend on Ather's ability to achieve profitable scaling of its operations and maintain its market share in the competitive Indian EV market
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