Ather Energy's IPO now open: Should you subscribe?
What's the story
Homegrown EV maker Ather Energy has opened its initial public offering today, looking to raise ₹2,981 crore through a mix of fresh equity and an offer for sale.
The company is offering 8.18 crore new equity shares and another 1.1 crore shares as part of the offer for sale (OFS).
Promoters Tarun Mehta (CEO of Ather Energy) and Swapnil Jain (CTO) will be offloading their stakes in the OFS.
Other selling shareholders include Tiger Global and IIT Madras incubation cell.
Fund allocation
IPO proceeds to fund various initiatives
Ather Energy intends to utilize the proceeds from its IPO for multiple purposes.
These include capital expenditure to establish an electric two-wheeler manufacturing unit in Maharashtra, repaying debts, investing in research and development (R&D), marketing initiatives, and general corporate purposes.
Backed by Hero MotoCorp, the company competes with Ola Electric in the electric two-wheeler space.
Analyst insights
Analysts endorse Ather Energy's IPO
The IPO price band for Ather Energy is set between ₹304 and ₹321, with a minimum bid requirement of 46 shares.
As of now, the grey market premium (GMP) for the issue stands at just 1%.
Despite the weak GMP, analysts have shown strong support for the IPO, citing Ather's leadership in India's growing electric two-wheeler market and its plans for expanding production capacity.
Recent product launches like the Ather Rizta have further strengthened its market appeal.
Future outlook
Ather Energy's future plans and market position
Ather Energy's management expects electric two-wheeler sales across India to grow at a rate of about 41-44% CAGR till FY31.
The company intends to expand its product portfolio, lower costs through localization and new battery technologies, and increase software monetization opportunities.
Even though it has been challenged due to lower government subsidies, Ather has improved its profitability metrics while reducing dependence on them.