Ather Energy IPO : The Indian electric vehicle (EV) market is buzzing with excitement, and Ather Energy is at the forefront of this revolution. With its much-anticipated Initial Public Offering (IPO) set to hit the market on April 28, 2025, investors are eager to know: Is the Ather Energy IPO a golden opportunity or a risky bet? In this engaging and easy-to-understand news blog, we’ll dive deep into Ather Energy’s IPO, analyze its financials, explore market trends, and help you decide whether this IPO is worth your investment. Packed with insights, financial ratios, and a Q&A section, this article is your one-stop guide to making an informed decision.
What is Ather Energy IPO All About?
Ather Energy, a Bengaluru-based electric two-wheeler manufacturer, is launching its ₹2,981-crore IPO, making it the first major mainboard IPO of the 2025-26 financial year. The IPO comprises a fresh issue of ₹2,626 crore and an offer-for-sale (OFS) of 1.1 crore equity shares, with a price band of ₹304–₹321 per share. This follows Ola Electric’s IPO in August 2024, positioning Ather as the second pure-play EV company to go public in India. The funds will be used to set up a new factory in Maharashtra, repay debt, boost R&D, and support marketing efforts.
Ather Energy is known for its premium electric scooters, like the Ather 450 series and the recently launched Ather Rizta, which cater to both performance and convenience seekers. With Hero MotoCorp holding a 40% stake and not selling shares in the IPO, there’s a strong signal of confidence in Ather’s long-term growth. But before you jump in, let’s break down the pros, cons, and financials to see if this IPO aligns with your investment goals.
Why Ather Energy IPO is Creating a Buzz
1. Booming EV Market in India
India’s two-wheeler market is massive, with 18.4 million units sold in FY24, and the EV segment is growing rapidly. The market is projected to grow at a 7% CAGR, reaching 30 million units by FY31. Ather holds a 12% market share in the electric two-wheeler segment, with 130,737 units sold in FY24, up from 108,936 the previous year. As EV adoption accelerates, Ather is well-positioned to capitalize on this trend.
2. Premium Positioning and Innovation
Ather stands out with its vertically integrated approach, manufacturing battery packs in-house and developing proprietary software like Atherstack. Its scooters, equipped with features like Alexa voice commands and traction control, appeal to tech-savvy and premium customers. This focus on innovation and quality gives Ather an edge over competitors like Bajaj and TVS.
3. Strong Backing from Hero MotoCorp
Hero MotoCorp’s 40% stake and decision not to sell shares in the IPO signal strong belief in Ather’s future. This partnership provides Ather with financial stability and access to Hero’s extensive distribution network, which could drive sales growth.
4. Capital Efficiency
Ather’s “capex-light” model, as highlighted by co-founder Tarun Mehta, emphasizes partnerships for production and retail. This approach keeps costs low and allows Ather to stay agile in a fast-evolving market.
Financial Performance: A Closer Look
Ather Energy’s financials show a mix of growth and challenges. While the company has reported consistent losses, its revenue growth and improving unit economics are promising. Below is a detailed table of key financial ratios and metrics based on the latest available data from FY23, FY24, and the nine months ending December 2024.
| Metric | FY23 | FY24 | 9M FY25 (Dec 2024) |
|---|---|---|---|
| Revenue (₹ Crore) | 1,780.9 | 1,753.8 | 1,578.9 |
| Net Loss (₹ Crore) | (864.5) | (1,059.7) | (577.9) |
| Loss Before Tax (₹ Crore) | (864.5) | (1,059.7) | Not Available |
| P/E Ratio | Not Applicable (Loss) | Not Applicable (Loss) | Not Applicable (Loss) |
| Market Share (EV 2W) | 10% | 12% | 16% (April 2025) |
| Units Sold | 108,936 | 130,737 | 107,983 (9M) |
Key Financial Insights:
- Revenue Trends: Ather’s revenue remained nearly flat from FY23 (₹1,780.9 crore) to FY24 (₹1,753.8 crore) but grew to ₹1,578.9 crore in the first nine months of FY25, indicating a recovery in sales driven by the Ather Rizta launch.
- Losses: The company’s net loss widened from ₹864.5 crore in FY23 to ₹1,059.7 crore in FY24 due to heavy investments in manufacturing and R&D. However, the loss narrowed to ₹577.9 crore in 9M FY25, showing improved cost management.
- Negative Cash Flows: Ather has reported negative cash flows since inception, which could persist as it expands its infrastructure. This is a risk for investors seeking short-term returns.
- Peer Comparison: Ather’s peers, such as Hero MotoCorp (P/E: 20), Bajaj Auto (P/E: 29), TVS Motor (P/E: 68), and Eicher Motors (P/E: 37), have positive earnings, making Ather’s valuation trickier to assess due to its losses.
Should You Invest in Ather Energy IPO?
Reasons to Invest
- Growth Potential: The EV market’s projected growth and Ather’s increasing market share (16% in April 2025) make it a compelling long-term bet.
- Premium Brand Appeal: Ather’s focus on premium scooters and innovative features positions it to capture the growing demand for high-end EVs.
- IPO Valuation: At ₹12,000–12,800 crore, Ather’s valuation is lower than its initial $2.5 billion target, potentially offering a bargain for investors.
- Strong Investor Interest: Top asset management companies like SBI, Invesco, and Birla are eyeing the IPO, indicating confidence in Ather’s prospects.
- Grey Market Premium (GMP): The GMP of ₹7 suggests a listing price of around ₹328, a 2.2% premium over the upper price band of ₹321, hinting at positive market sentiment.
Risks to Consider
- Persistent Losses: Ather’s ongoing losses and negative cash flows raise concerns about profitability, especially in a competitive market.
- Market Volatility: The IPO comes amid uncertainty around global tariffs and local market corrections, which could impact listing performance.
- Competition: Ather faces stiff competition from Ola Electric, Bajaj, and TVS, which have deeper pockets and broader product portfolios.
- Valuation Concerns: While the IPO size was reduced from ₹4,000 crore, some analysts believe the ₹12,000-crore valuation is still ambitious given Ather’s losses.
- Dependence on Subsidies: Stable government policies have supported Ather’s growth, but any policy changes could affect demand.
Expert Opinions and Market Sentiment
Analysts are divided on Ather Energy’s IPO. Some see it as a high-risk, high-reward opportunity due to the EV sector’s growth potential, while others caution against its lack of profitability. Tarun Mehta, Ather’s CEO, emphasized the company’s focus on unit economics and backward integration to drive cost efficiencies, which could pave the way for profitability. Posts on X reflect excitement about the IPO being the first mainboard issue of FY26, with retail investors eyeing the 10% retail portion and employee quota.
The grey market premium of ₹7 indicates moderate optimism, but investors should note that GMP is not a reliable indicator of listing gains. Hero MotoCorp’s decision to hold its stake is a positive signal, but the broader market’s response to Ather’s listing will depend on subscription rates and post-listing performance.
How to Approach the Ather Energy IPO
If you’re considering investing, here’s a step-by-step guide:
- Assess Your Risk Appetite: Ather is a growth-oriented company with losses, so it’s suitable for investors comfortable with high risk and a long-term horizon.
- Analyze Financials: Review the financial table and peer P/E ratios to understand Ather’s position relative to competitors.
- Monitor Subscription Trends: Strong demand from anchor investors (bidding opens April 25) and retail investors (April 28–30) could indicate market confidence.
- Check Market Conditions: Keep an eye on global and local market trends, as volatility could affect listing gains.
- Consult a Financial Advisor: If unsure, seek professional advice to align the investment with your portfolio goals.
Conclusion: Is Ather Energy IPO Worth It?
The Ather Energy IPO is an exciting opportunity to invest in India’s EV revolution, but it’s not without risks. If you believe in the long-term potential of electric vehicles and are willing to tolerate short-term losses, Ather’s premium positioning, innovative products, and growing market share make it a compelling choice. However, cautious investors may want to wait for post-listing performance to gauge market reception.
With a valuation of ₹12,000–12,800 crore and strong backing from Hero MotoCorp, Ather Energy is poised for growth, but profitability remains a key challenge. Weigh the pros and cons, analyze the financials, and make an informed decision that aligns with your investment strategy.
Frequently Asked Questions (FAQs)
Q1: When does the Ather Energy IPO open and close?
A: The IPO opens for subscription on April 28, 2025, and closes on April 30, 2025. Anchor investor bidding is scheduled for April 25, 2025.
Q2: What is the price band for Ather Energy IPO?
A: The price band is set at ₹304–₹321 per equity share, with a face value of ₹1.
Q3: How will Ather Energy use the IPO proceeds?
A: The funds will be used to establish a new factory in Maharashtra, repay debt, invest in R&D, support marketing, and meet general corporate needs.
Q4: Is Ather Energy profitable?
A: No, Ather Energy has reported losses, with a net loss of ₹1,059.7 crore in FY24 and ₹577.9 crore in the first nine months of FY25. However, losses have narrowed, indicating improving financial health.
Q5: What is the grey market premium (GMP) for Ather Energy IPO?
A: The GMP is ₹7, suggesting a potential listing price of ₹328, about 2.2% above the upper price band of ₹321.
Q6: Who are Ather Energy’s competitors?
A: Ather competes with Ola Electric, Bajaj Auto, TVS Motor, and Hero MotoCorp in the electric two-wheeler market.
Q7: Should I invest in Ather Energy IPO for short-term gains?
A: The IPO may offer listing gains given the GMP, but short-term volatility is possible. It’s better suited for long-term investors betting on EV growth.
Q8: How does Ather Energy compare to its peers?
A: Ather’s peers like Hero MotoCorp (P/E: 20), Bajaj Auto (P/E: 29), and TVS Motor (P/E: 68) are profitable, while Ather is loss-making, making its valuation riskier but growth-focused.
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Disclaimer: Investing in IPOs involves risks, and past performance is not indicative of future results. Consult a financial advisor before making investment decisions.