Ather Energy IPO sails through on final day as QIBs come to rescue; check GMP and other details

After receiving muted response on the first two days of bidding, the ₹2,981-crore initial public offering (IPO) of Ather Energy sailed through on the last day of bidding on Wednesday as qualified institutional buyers (QIBs) come to rescue. The QIBs, which stayed away on the first two days of bidding, participated strongly on the last day as the quota reserved for them subscribed 1.3 times by 1:30 PM today.

Overall, Ather Energy IPO, being offered at a price band of ₹304-321 per share, was subscribed 1.08 times as investors applied for 5.77 crore equity shares compared to the offer size of 5.33 crore shares, the exchange data showed. The issue was booked 0.17% on Day 1 and 30% on Day 2.

The issue managed to garner steady support from retail investors, as the quota reserved for them fully subscribed on Day 2. At the time of reporting, the segment was booked 1.47%. However, the non-institutional investors’ (NIIs) category was subscribed to just 35% of the portion allocated to them, while employee’s quota was the most aggressive as that window was subscribed nearly 4.3 times.

The NIIs, who are typically high-net-worth individuals, have seemed to have decided to give a miss to the IPO, which can be attributed to various factors, including higher investment risks and capital lock-in.

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.

Meanwhile, the grey market premium (GMP) of Ather Energy shares in the unlisted market stands at ₹1, dropping sharply from ₹17 on April 22, albeit it has improved from zero level touched on April 27, reflecting cautious market sentiment. This can be attributed to various factors, including the company's financial health and lack of public excitement amid fragile market conditions.

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).

The shares of EV startup, backed by investors including Hero MotoCorp , Sachin Bansal, Binny Bansal, Tiger Global, and the National Investment and Infrastructure Fund (NIIF), are expected to be listed on the BSE and NSE on May 6, 2025. This is the first and largest mainboard public issue of the financial year 2025-26 and second pure-play EV IPO after Ola Electric 's ₹6,146-crore issue.

As per the DRHP, the company proposes to utilise the net proceeds of the fresh issue towards funding of capital expenditure requirements for establishment of an electric two-wheeler factory in Maharashtra for ₹927.2 crore; investment in research and development worth ₹750 crore; repayment or pre-payment, in full or part, of certain borrowings availed by the company (₹378.2 crore); expenditure towards marketing initiatives (₹300 crore); and general corporate purposes.

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