Ather Energy IPO off to slow start: 0.08x subscription in 3 hours; check GMP, review, other details

The highly awaited initial public offering (IPO) of Ather Energy started on a subdued note, with the issue subscribing marginally in the first three hours of trade so far. According to BSE data, by around 12:34 PM today, Ather Energy IPO received bids for 41,25,832 shares against the 5,33,63,160 shares on offer, translating to a subscription of just 0.08 times.

The data showed that quota reserved for retail investor was booked 0.38 times, followed by 0.02 times in non-institutional investors (NIIs) space, primarily high-net-worth individuals. Meanwhile, the qualified institutional buyer (QIB) portion failed to account so far. On the other hand, the portion set aside for employees was fully subscribed by 1.1 times.

The company has reserved up to 75% of public issue for QIB, 15% for NII, and remaining 10% for retail investors. The employee quota has been reserved up to 100,000 equity shares, which will be offered at a discount of ₹30 per equity share.

The weak response to Ather Energy IPO was in line with Street expectations as suggested by falling grey market premium (GMP) of electric two-wheeler (E2W) maker’s shares in the unlisted market. The GMP dropped to zero ahead of opening of the IPO, from its peak of ₹17 on April 22, to ₹10 on April 23, and further on ₹3 on April 26. This can be attributed to various factors, including the company's financial health and lack of public excitement amid fragile market conditions.

The three-day IPO of EV startup will close on April 30, while shares are expected to be listed on the BSE and NSE on May 6, 2025. The electric vehicle maker has set a price band of ₹304-321 per share for its IPO, which is a combination of fresh equities and offer for sale (OFS) by selling shareholders. The IPO of Tarun Mehta and Swapnil Jain co-promoted firm comprises of fresh equities worth ₹2,626 crore and OFS of up to 1.1 crore shares, which at the upper end of the price band amounts to around ₹355 crore.

The lot size is 46 equity shares and in multiples thereafter, which means minimal application amount for one lot for retail investor would be ₹14,766 (at upper end of price band).

Analysts view on Ather Energy IPO

The IPO has received mixed reaction from brokerage houses, with some, including SBI Securities, recommending "Avoid", citing factors like ongoing losses, high valuation, and dependence on a specific region. Despite being a leading electric two-wheeler manufacturer, Ather's financial performance, including losses in recent years, is a major concern for investors, while brokerages remained skeptical about its imports from specific countries, including China, amid ongoing trade tensions between U.S. and China.

On the other hand, Bajaj Broking has recommended subscribing to the issue with a long-term perspective; while Arihant Capital and Ventura Securities have suggested subscribing to the Ather Energy IPO for listing gains. 

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