Ather vs Ola Electric IPO: The brutal truth about what investors really want in EV startups

Ending a two-month dry spell in the initial public offering (IPO) market, electric two-wheeler manufacturer Ather Energy this week launched the first and largest mainboard public issue of the financial year 2025–26. This is the second pure-play EV company to hit Dalal Street after Bhavish Aggarwal-led Ola Electric, the country’s biggest e-scooter maker, which made its debut on the BSE and NSE in August last year.

Despite having a first-mover advantage, Tarun Mehta and Swapnil Jain co-promoted EV maker received a tepid response from investors, especially from non-institutional investors (NIIs), as the quota reserved for them failed to fully subscribe. In terms of IPO buzz, the response was subdued compared to its listed peer Ola Electric. Notably, the IPO came at a time when the secondary market remained volatile and jittery amidst geopolitical tensions along the Indo-Pak border and macroeconomic uncertainty.

 The ₹2,981 crore IPO of Ather Energy, which opened for subscription between April 28–30, sailed through on the final day of bidding as qualified institutional buyers (QIBs) came to the rescue in the last few hours. The IPO, being offered at a price band of ₹304–321 per share, was subscribed 1.5 times as investors applied for 7.67 crore equity shares worth ₹2,463.65 crore (at the upper end of the price band), compared to the offer size of 5.11 crore shares. The issue was booked 0.17% on Day 1 and 30% on Day 2.

 The ₹2,981 crore IPO of Ather Energy, which opened for subscription between April 28–30, sailed through on the final day of bidding as qualified institutional buyers (QIBs) came to the rescue in the last few hours. The IPO, being offered at a price band of ₹304–321 per share, was subscribed 1.5 times as investors applied for 7.67 crore equity shares worth ₹2,463.65 crore (at the upper end of the price band), compared to the offer size of 5.11 crore shares. The issue was booked 0.17% on Day 1 and 30% on Day 2.

The IPO received decent support from retail investors, as the quota reserved for them was fully subscribed on Day 2. Overall, the segment was booked 1.89% on the final day. The QIBs, who stayed away on the first two days of bidding, participated strongly on the last day as the quota reserved for them was subscribed 1.76 times. The employees' quota was the most aggressive, as that window was subscribed nearly 5.43 times.

However, NIIs, typically high-net-worth individuals, decided to give the IPO a miss, as the category reserved for them was booked just 69%. This can be attributed to various factors, including higher investment risks and capital lock-in.

Ather had reserved up to 75% of the public issue for QIBs, 15% for NIIs, and 10% for retail investors. The employee quota was reserved up to 100,000 equity shares, which were offered at a discount of ₹30 per equity share.

In comparison, Ola Electric's ₹6,146 crore issue was subscribed 4.45 times amid a broad-based response from all three investor categories, by issuing shares at ₹76 apiece. The issue garnered 5.53 times bidding in the QIB portion, 2.51 times in the NII segment, and 4.05 times in the retail space. The quota reserved for employees was subscribed 12.38 times. The quota reserved for QIBs, NIIs, and retail was similar to Ather.

Ahead of the IPO, Ather Energy raised ₹1,340 crore from 36 anchor investors by allotting 4.18 crore equity shares. On the other hand, Ola raised ₹2,763 crore by allotting 36.35 crore equity shares to 84 anchor investors.

Both EV makers continue to incur losses

In terms of financial performance, both EV majors continue to incur operating losses as they are investing aggressively in expanding manufacturing capabilities, distribution networks, product portfolios, and charging infrastructure.

Over the past three financial years, Ather, on a consolidated basis, reported total income of ₹1,789.10 crore in FY24, ₹1,801.80 crore in FY23, and ₹413.80 crore in FY22. The net loss stood at ₹344.10 crore, ₹864.50 crore, and ₹1,059.70 crore for FY22, FY23, and FY24, respectively.

For the nine months ended December 31, 2024 (9M FY25), it posted a loss of ₹577.90 crore on a total income of ₹1,617.40 crore, as against a loss of ₹766.40 crore on a total income of ₹1,253.70 crore for the corresponding period in the previous year.

Meanwhile, Ola Electric posted a net loss of ₹564 crore in Q3 FY25, which widened from a loss of ₹376 crore in the year-ago quarter and ₹495 crore in the September quarter of FY25. The company’s revenue from operations declined 19.36% to ₹1,045 crore, from ₹1,296 crore in the same period last year.

The shares of Ather Energy are set to make their debut on the BSE and NSE on May 6, 2025. The allotment of shares to applicants is expected to be finalised on May 2, 2025.