What is Ather Energy and why Ather IPO in pipeline?
Ather Energy Limited, India’s premium electric two-wheeler (E2W) manufacturer, is heading towards its IPO – Ather IPO, with a blend of excitement and caution among investors. Incorporated in 2013 and promoted by Tarun Mehta, Swapnil Jain, and Hero MotoCorp, Ather plans to raise approximately ₹31,000 million via a fresh issue, along with an Offer for Sale (OFS) of 22 million shares.
Let’s dive into a detailed, conversational evaluation of Ather’s IPO.
When is the Ather IPO happening and what are the key details?
- Subscription Period: April 28–30, 2025
- Allotment Finalization: May 2, 2025
- Listing Date: May 6, 2025 (NSE and BSE)
- Price Band: ₹304–₹321 per share
- Lot Size: 46 shares (Minimum investment of ₹14,766)
- Total Issue Size: ₹2,981.06 crore (Fresh Issue: ₹2,626.30 crore; OFS: ₹354.76 crore)
How does Ather Energy make money? – Ather IPO
Ather Energy operates an integrated business model focusing on:
- Design, manufacturing, and sales of premium electric scooters (450S, 450X)
- Charging infrastructure (Ather Grid)
- Connected services via subscription (navigation, diagnostics, OTA updates)
- Retail experience centers (Ather Space)
Revenue sources:
- Sale of vehicles (~90% of revenue)
- Subscription services (~5%)
- Charging infrastructure (~3%)
- Merchandise and accessories (~2%)
What are Ather’s main products? – Ather IPO
| Model | Key Features |
|---|---|
| 450X | Fast charging, high speed (~90 km/h), 150 km range, touchscreen dashboard |
| 450S | Value model, 115 km range, similar connectivity features |
Ather also boasts a fast-growing network of charging stations (Ather Grid) with 1,400+ public fast chargers as of FY24.
How is Ather Energy performing financially?
Ather IPO’s evaluation can be boosted if we add the evaluation of its financials per the DRHP
| Metric | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue (₹ Cr) | 408 | 1,784 | 1,980 |
| EBITDA Margin (%) | -66.1% | -31.7% | -12.2% |
| Net Loss (₹ Cr) | -344 | -865 | -353 |
| Gross Margin (%) | 6.6% | 12.9% | 28.1% |
| R&D Expense (% of Revenue) | 29.4% | 9.1% | 5.5% |
Key Takeaways:
- Revenue grew ~4.8x in two years.
- Gross margins have expanded significantly.
- Still not profitable, but losses have narrowed dramatically.
How does Ather stack up against its peers?
For investing in Ather IPO, it is crucial to understand how does the stock compare with its peers.
| Company | Market Share (%) | FY24 Revenue (₹ Cr) | Net Profit (₹ Cr) | PE Ratio | ROCE (%) |
|---|---|---|---|---|---|
| Ola Electric* | ~35% | 2,782 | -267 | NA | NA |
| Ather Energy | ~11% | 1,980 | -353 | NA | NA |
| TVS iQube (TVS Motors) | ~24% | NA (Integrated with ICE) | Positive | 28x | 22% |
| Bajaj Chetak (Bajaj Auto) | ~12% | NA (Integrated with ICE) | Positive | 25x | 27% |
*Ola figures are based on available estimates.
Observation:
- Ather is currently the third-largest premium EV player.
- Traditional giants like TVS and Bajaj are more financially stable.
How are investors reacting to the Ather IPO?
- Anchor Investors: ₹1,340 crore raised from 36 funds (including Franklin Templeton, Abu Dhabi Investment Authority).
- Grey Market Premium (GMP): ₹0 — indicating cautious optimism.
- Day 1 Subscription:
- Retail: 23% subscribed
- NII: 2% subscribed
- QIB: Yet to subscribe
- Employees: 67% subscribed
Broker Opinions:
- SBI Securities: Advises “Avoid” due to profitability issues.
- Arihant Capital: Suggests “Subscribe” for possible listing gains.
- Geojit Financial Services: Subscribe only if you have a high-risk appetite.
What is the CEO saying about Ather’s future? – Ather IPO
- On Supply Chain: “We remain unaffected by China’s rare earth export restrictions.”
- On Customer Loyalty: “Consumers trust brands, not just products.”
- On Profitability: “We will continue improving EBITDA margins with scale and optimization.”
What are the advantages of investing in Ather IPO?
- Industry growth (36% CAGR expected till FY30)
- Strong brand image
- Backing by Hero MotoCorp
- High-tech differentiation (OTA, self-diagnostics)
- Improving gross margins
What are the risks involved in Ather IPO?
- Continued cash burn till breakeven
- Aggressive competition (Ola, TVS, Bajaj)
- Dependence on fresh fundraising
- Policy shifts (like FAME II subsidies rollback)
- Product recall or safety risks
How does competition and funding affect Ather Energy?
- Fierce competition keeps pricing and profitability under pressure.
- Cost of capital is high; fresh fundraising is critical.
- Hero MotoCorp’s 36% stake brings stability but also governance influence.
What is the future outlook for the EV sector?
- EV 2W penetration expected to reach 40-45% by 2030.
- FAME III subsidies and state EV policies are tailwinds.
- Lithium price correction benefits battery manufacturing costs.
Who should consider investing in Ather’s IPO?
Ideal For:
- High-risk appetite investors
- EV sector believers
- 5+ year horizon investors
Avoid If:
- You seek immediate listing gains
- You prefer stable, dividend-paying stocks
Final Thoughts: Should you bet on Ather IPO?
Ather Energy presents a high-growth, high-risk opportunity. If you believe in India’s EV story and are ready for a volatile but potentially rewarding journey, Ather could be a good fit for your portfolio.
However, caution is warranted given the competition, profitability concerns, and sector dynamics.
Source:
Disclaimer: This blog is purely informational and does not constitute financial advice. Always consult with a certified financial advisor before making investment decisions.
We have done a similar analysis of Nifty 500 stocks, some related to auto companies like Bajaj Auto, some considering their broad market movements like Newgen Software, post-market summaries, static topics like VIX and much more. So, subscribe and become a mindful investor.
We have also covered Ather IPO’s qualitative analysis in a previous blog, follow the link and read on.
