Ather Energy’s much-anticipated IPO is struggling to gain traction, with Day 2 subscription figures painting a cautious picture for investors watching market trends.
Subdued Demand Amid Flat GMP
As of the second day of bidding, Ather Energy’s IPO has garnered a muted response. The overall issue was subscribed just 0.23 times, with retail investors contributing a modest 0.94x. Meanwhile, Qualified Institutional Buyers (QIBs) have yet to make an appearance, and Non-Institutional Investors (NIIs) barely participated, posting a subscription rate of only 0.19x. With the grey market premium (GMP) holding steady at just ₹1, momentum appears lackluster as the subscription window nears its end.
The ₹2,981.06 crore IPO, which opened on April 28, received bids for 86,09,406 equity shares against 5,33,63,160 on offer, translating to a dismal 16% subscription by the end of Day 1. The slow uptake raises concerns about investor confidence, particularly in the face of increased volatility in auto stocks and broader market uncertainties.
Brokerage Outlooks: Mixed Signals
Bajaj Broking advises caution, highlighting Ather’s financial headwinds. With accumulated losses and borrowings exceeding ₹1,121 crore as of December 2024, the firm sees limited near-term upside. However, it acknowledges Ather’s strong parentage and recommends the IPO only for long-term investors with surplus capital.
In contrast, Ventura Securities takes a more optimistic view, rating the IPO a ‘Subscribe for listing gains.’ It points to Ather’s innovation-led R&D, the Ather Grid charging infrastructure, and premium market positioning as competitive advantages. Notably, the company is scaling production through its Ather Factory 3.0, targeting a capacity of 10 lakh units by mid-FY26 despite subsidy cuts and underutilized capacity.
Arihant Capital echoes Ventura’s sentiment, also recommending a ‘Subscribe for listing gain.’ The firm highlights Ather’s strong foothold in India’s electric two-wheeler segment, bolstered by recent launches like the Ather Rizta. The upcoming factory expansion is set to ramp up production from 420,000 to 1.42 million units by FY27, potentially improving operating margins through cost efficiencies and ongoing R&D investment.
Meanwhile, Nuvama Institutional Equities has not assigned a formal rating but shared insights following discussions with Ather’s leadership. The company is diversifying its portfolio with two new platforms—EL for scooters and Zenith for motorcycles. Expansion plans also include broader geographic coverage beyond the South Indian market, which currently accounts for 61% of sales. The new Maharashtra plant is expected to boost output in phases, starting with 0.5 million units.
Looking Ahead: What’s at Stake
With one day left for subscription, investor sentiment appears cautious despite Ather’s potential in the EV space. The lack of strong institutional interest and a flat GMP underscore prevailing concerns about valuation and market readiness. That said, the IPO could still attract selective interest from those betting on long-term growth in electric mobility and auto sector transformation.
Investors considering entry should weigh the short-term risks against Ather’s future scalability, innovation-driven growth, and its place in India’s evolving EV ecosystem.