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Ather’s Big Bet: IPO Subscribed 15% — Is the Spark Fading?

 

India’s electric two-wheeler pioneer, Ather Energy, hit the markets with its ₹2,981 crore IPO on April 28, 2025. However, investor response on Day 1 remained measured the issue was subscribed just 15%, signaling a mix of curiosity and caution among the market participants.

Priced between ₹304–₹321 per share, and requiring a minimum investment of around ₹13,984 for a lot of 46 shares, the IPO aims to fuel Ather's next big leap in India's booming EV space. Let’s break down how the numbers stack up and what’s fueling the buzz (and hesitation) around this offer.

IPO Subscription Snapshot: Where Do Investors Stand?

As of 3:52 PM IST on Day 1:

  • Overall Subscription: 15% (bids for 69,93,978 shares vs 5,33,63,160 shares on offer)

  • Retail Investors (RIIs): Subscribed 59% — a healthy showing with bids for 57.5 lakh shares.

  • Non-Institutional Investors (NIIs): Subscribed 15%, showing tentative interest.

  • Qualified Institutional Buyers (QIBs): No major moves yet.

  • Employee Quota: Oversubscribed 1.47x — insiders seem confident.

The IPO remains open for bidding till April 30, 2025, with allotment expected by May 2 and listing scheduled on May 6 on the NSE and BSE.

What’s Ather Raising Money For?

Ather Energy plans to channel the proceeds into multiple strategic areas:

  • ₹927.2 crore to set up a brand-new manufacturing facility in Maharashtra.

  • ₹40.03 crore for clearing some of its debt.

  • ₹750 crore to beef up R&D — with a special focus on battery tech and software innovation.

  • ₹300 crore earmarked for marketing and brand building.

  • The rest will go towards general corporate purposes, including operational needs.

A Quick Look at Ather's Financials

The numbers show a classic high-growth, high-investment story — but not without its red flags.

  • FY24 Revenue: ₹1,789.1 crore (down slightly from ₹1,801.8 crore in FY23)

  • FY24 Net Loss: ₹1,059.7 crore (widening from ₹864.5 crore in FY23)

  • Cash Reserves: Improved to ₹506 crore (up from ₹368 crore last year)

For the nine months ending December 2024:

  • Revenue grew 28% YoY to ₹1,617.4 crore.

  • Net losses narrowed by 25% YoY to ₹599.2 crore.

  • Still, EBITDA losses remain heavy at ₹408.5 crore.

Debt stood at ₹533.6 crore as of February 28, 2025.

While revenue momentum looks promising, continued losses and steep valuations (6x EV/sales) are causing some analysts to flash caution signs.

Ather's Competitive Edge  and the Risks

Founded in 2013 by IIT grads Tarun Mehta and Swapnil Jain, Ather Energy has carved out a premium niche with models like the 450X and the newly launched Rizta. Its innovations like the Ather Grid charging network and in-house R&D are impressive.

Ather sold 1.09 lakh units in FY24, grabbing a 14% market share by December 2024 (up from just 6% in April 2024).

However, the road ahead isn’t without potholes:

  • Stiff competition from Ola Electric, TVS, Bajaj, and Honda.

  • Supply chain dependency on imports, especially from China.

  • Profitability challenges amid relentless spending on growth.

Anchor Investors Show Confidence — But the Grey Market Is Lukewarm

Ather already roped in ₹1,340 crore from big players like Eastspring Investments, Abu Dhabi Investment Authority, and Morgan Stanley ahead of the IPO.

However, as of April 28, the Grey Market Premium (GMP) is flat at ₹0–₹5 — suggesting little upside on listing. The projected listing price hovers between ₹321–₹326, with estimated gains of barely 0–1.56%.

Should You Ride Along with Ather Energy?

If you believe in India's EV growth story and are willing to stay invested for the long haul, Ather offers an interesting play  especially given its market share gains and tech-first approach.

But, it’s important to note:

  • The IPO is expensive at a 5.7x price-to-sales ratio.

  • No profitability yet, either at EBITDA or PAT levels.

  • Brokerages like SBI Securities and Deven Choksey Research have advised caution.

  • Ashika Institutional Equities see a positive long-term story but recommend waiting for a better entry after listing.

Tip: Dive deep into Ather’s Red Herring Prospectus and check with your financial advisor before committing.

Final Take

The 15% Day 1 subscription signals guarded optimism  not an all-out rush. Ather Energy’s ambitious expansion plans and strong brand recall make it a potential long-term winner, but high valuations and cash burn risks are very real. Keep a close eye on Day 2 and Day 3 subscription numbers  they’ll reveal whether bigger players are ready to jump in.

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