Ather Energy IPO: Key Details, Grey Market Premium (GMP) Update, and Should You Subscribe?


Ather Energy, one of India’s leading electric two-wheeler (E2W) manufacturers, has officially opened its Initial Public Offering (IPO) for subscription today, April 28, 2025. Known for its innovative e-scooters like the Ather 450 series and the recently launched family-oriented Rizta model, Ather's public issue has garnered significant attention among investors. Here's an in-depth look at the IPO details, current Grey Market Premium (GMP) trends, and expert opinions on whether you should consider subscribing.

IPO Structure and Price Band

The Ather Energy IPO is sized at approximately ₹2,981.06 crore. This includes a fresh issuance of shares worth ₹2,626 crore and an offer for sale (OFS) component totaling ₹354.76 crore. The company has set the price band for the IPO between ₹304 and ₹321 per share. Investors can bid for a minimum lot size of 46 shares and in multiples thereafter, making it accessible for a broad range of retail participants.

The funds raised from the fresh issue are intended to support the company's expansion plans, enhance its production capabilities, invest in research and development, and strengthen its retail and charging infrastructure across India.

Grey Market Premium (GMP) Insights

The Grey Market Premium (GMP), often seen as an unofficial indicator of investor sentiment towards an IPO, has shown a noticeable decline for Ather Energy. As of April 28, the GMP has flattened out to ₹0. This suggests that shares are trading at par with the issue price in the unofficial grey market — a significant drop from the ₹20 premium seen earlier on April 23.

A declining GMP typically indicates a cooling off in investor enthusiasm, possibly due to broader market conditions, sectoral challenges, or concerns regarding valuation.

Subscription Status on Day 1

On the first day of the IPO opening, Ather Energy witnessed a modest response. The issue has been subscribed 8% overall so far. Among various investor categories:

  • The retail individual investors (RIIs) have shown better interest, with the portion subscribed around 41%.

  • The employee segment saw strong traction, being oversubscribed at 128%.

  • Meanwhile, the non-institutional investors (NIIs) and qualified institutional buyers (QIBs) segments recorded limited participation initially.

It’s important to note that subscription levels often pick up momentum closer to the closing dates of an IPO, especially as institutional investors come in towards the end.

Company Overview and Financial Health

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy has positioned itself as a tech-driven, premium electric scooter manufacturer. The brand is known for its emphasis on innovation, smart connected vehicles, and a seamless customer experience.

In terms of financial performance, Ather Energy reported a 28% rise in revenue for the nine-month period ending December 2024, primarily driven by the success of its new Rizta model. Despite this growth, the company is still navigating its path towards consistent profitability, an important factor that cautious investors are weighing while evaluating this IPO.

Analysts' Opinions and Recommendations

Despite the subdued GMP and the cautious early subscription response, several market analysts have a positive view of Ather Energy’s long-term potential.

  • Arihant Capital has recommended subscribing to the IPO for potential listing gains, highlighting Ather's solid foothold in the high-growth electric two-wheeler space and its technological edge.

  • Geojit Financial Services has advised that only high-risk investors with a long-term investment horizon should consider subscribing. They cited Ather’s market leadership and product innovation as strengths, while also warning about the company’s profitability risks and the competitive intensity in the EV segment.

Experts generally agree that Ather Energy offers an opportunity to invest in a sector poised for rapid growth, but it comes with the typical risks associated with emerging technology companies.

Final Verdict

The Ather Energy IPO is an interesting proposition, especially for those who believe in the future of electric mobility in India. The company's strong brand positioning, technological expertise, and expanding product lineup offer promising growth prospects.

However, the flat GMP and initial muted response should serve as a reminder that short-term listing gains might be uncertain. Investors should carefully assess their risk appetite and investment horizon before taking a position. For those willing to stay invested for the long term, Ather Energy could be a rewarding bet as India's EV story unfolds.

Disclaimer:
The information provided in this article is for informational purposes only and should not be construed as investment advice or a recommendation to subscribe to any IPO. Investing in securities involves risks, and readers are advised to consult with a qualified financial advisor before making any investment decisions. The views expressed are based on publicly available information and personal interpretation, which may be subject to change. Neither the author nor the publisher holds any responsibility for any financial loss incurred as a result of acting on the information provided herein.

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