Ather Energy, one of India’s top electric two-wheeler players, made its stock market debut with high expectations but saw its shares fall nearly 8% on the first day, despite opening 2.2% above the IPO price. In this Startup INIDAX article, we break down the reasons behind Ather Energy’s sharp post-listing fall, analyze its financials, market sentiment, and competitive landscape, and discuss what this means for investors eyeing the fast-evolving EV sector. If you want to know why Ather Energy’s IPO fizzled and what’s next for the company, read on for all the key insights.
Introduction: The Hype Around Ather Energy’s IPO
Ather Energy has long been a buzzword in India’s electric vehicle (EV) revolution. Founded in 2013, the company quickly became a leader in the electric two-wheeler market, known for its innovative scooters, smart features, and robust charging infrastructure. Backed by marquee investors like Hero MotoCorp, Ather Energy’s IPO was highly anticipated, especially as it became the first major EV listing of FY26 and only the second after Ola Electric. The question on everyone’s mind: Could Ather Energy’s stock electrify the market as much as its scooters have done on the roads?
Ather Energy IPO Details: Price, Subscription & Listing
IPO Structure and Timeline
- Price Band: ₹304–₹321 per share
- Issue Size: ₹2,981 crore (Fresh issue: ₹2,626 crore; Offer for Sale: ₹355 crore)
- Minimum Investment: 46 shares per lot
- Anchor Investors: Raised ₹1,340 crore from prominent names before launch
- Subscription Window: April 28–30, 2025
- Listing Date: May 6, 2025, on NSE and BSE
Subscription Breakdown
| Category | Subscription (x) |
|---|---|
| Qualified Institutional | 1.70–1.76 |
| Retail Investors | 1.78–1.89 |
| Non-Institutional (NII) | 0.66–0.69 |
| Employees | 5.43 |
| Overall | 1.43–1.5 |
Despite the hype, the IPO saw only a modest subscription, especially from non-institutional investors, signaling early caution from the market.
Day 1 Performance: How Ather Energy Shares Fared
Ather Energy’s shares listed at ₹328 on the NSE-a 2.2% premium over the issue price of ₹321. However, the excitement was short-lived. The stock quickly lost ground, ending the first trading day at ₹300, down nearly 8% from its debut and below the IPO price.
Key Listing Highlights
- Opening Price: ₹328 (NSE), ₹326.05 (BSE)
- Highest Price on Day 1: ₹333
- Closing Price: ₹300 (NSE), down 8.54% from debut
- Market Capitalization: ₹11,306 crore at close
This sharp fall surprised many, especially given the brand’s strong reputation and the initial listing premium.
Why Did Ather Energy Shares Fall After Listing?
Several factors contributed to Ather Energy’s disappointing post-listing performance:
- Aggressive Valuation: Analysts widely believed the IPO was priced aggressively, especially compared to Ola Electric, its closest rival. This left little room for immediate listing gains.
- Flat Revenue Growth: Ather’s revenue for FY24 was ₹1,753.8 crore, almost unchanged from ₹1,780.9 crore in FY23, raising concerns about growth momentum.
- Widening Losses: Loss before taxes ballooned to ₹1,059.7 crore in FY24, up from ₹864.5 crore in FY23 and ₹344.1 crore in FY22.
- Muted Investor Demand: The IPO was only 1.5 times subscribed overall, with non-institutional investors subscribing to just 66–69% of their quota.
- Competitive and Capital-Intensive Sector: The electric two-wheeler market is highly competitive and requires heavy investment, making profitability elusive for most players, including Ather Energy.
- Grey Market Premium (GMP) Disappointment: The GMP suggested a higher listing, but the actual debut was only slightly above the IPO price, leading to quick profit booking.
- Broader Market Caution: With the EV sector still nascent and many players unprofitable, investors are wary of overpaying for future growth.
Financials: Losses, Revenue, and Profitability Challenges
Ather Energy’s financials paint a picture of a fast-growing but still loss-making company:
| Financial Year | Revenue (₹ crore) | Loss Before Tax (₹ crore) |
|---|---|---|
| FY22 | 1,780.9 | 344.1 |
| FY23 | 1,753.8 | 864.5 |
| FY24 | 1,753.8 | 1,059.7 |
- Stagnant Revenue: Flat revenue growth over the past two years is a concern for a company in a supposedly high-growth sector.
- Rising Losses: Losses have widened significantly, reflecting high R&D, marketing, and expansion costs.
- Market Share: Despite these challenges, Ather holds an 11.5% market share, making it the third-largest electric two-wheeler player in India.
How Ather Energy Plans to Use IPO Funds
Ather Energy has outlined a clear plan for its IPO proceeds:
- New Factory: Establishing a new electric two-wheeler factory in Maharashtra
- Debt Repayment: Reducing existing corporate borrowings
- R&D and Marketing: Investing in product innovation and brand-building
- General Corporate Purposes: Supporting ongoing business needs
These investments are crucial for scaling up production, expanding the product lineup, and strengthening Ather’s position in a highly competitive market.
Market Reaction: Analyst and Investor Sentiment
Market experts and analysts had mixed views on Ather Energy’s IPO and listing:
“As expected, we see a flat listing, which was justified, as the issue was aggressively priced, especially when benchmarked against peer OLA Electric. The electric two-wheeler segment remains highly competitive and capital-intensive, with most players, including market leaders, struggling to achieve sustainable profitability.”
- Prashanth Tapse, Mehta Equities
Retail investors showed more interest than institutions, but overall sentiment was muted due to concerns about valuation and ongoing losses.
Competitive Landscape: Ather Energy vs Ola Electric
Ather Energy’s biggest rival is Ola Electric, which also recently went public. Both companies are known for:
- Smart, Connected Scooters: Innovative features and proprietary software
- Charging Infrastructure: Nationwide fast-charging networks
- Aggressive Growth Plans: Heavy investments in R&D and marketing
However, Ola Electric enjoys a larger market share and higher sales volumes, putting pressure on Ather to accelerate its growth and move towards profitability.
What’s Next for Ather Energy and Its Investors?
Short-Term Outlook:
The weak listing and price drop may deter short-term investors, and the stock could remain under pressure until the company shows clear signs of revenue growth and loss reduction.
Long-Term Potential:
Ather Energy’s strong brand, expanding infrastructure, and government support for EVs provide a foundation for future growth. However, investors must be patient and prepared for volatility as the company works towards profitability.
Risks to Watch:
- Persistent losses and stagnant revenue
- Intense competition from Ola Electric and others
- High capital requirements and execution risks
Conclusion: Should You Buy, Sell, or Hold Ather Energy Shares?
Ather Energy’s IPO debut was a reality check for both the company and the broader EV sector. While the brand remains strong and India’s electric mobility market is poised for growth, investors are rightfully cautious about high valuations and persistent losses. For now, Ather Energy stock may be best suited for patient, long-term investors who believe in the EV story and can ride out volatility. Stay tuned with Startup INIDAX for the latest analysis and updates on Ather Energy and India’s dynamic startup ecosystem.
Frequently Asked Questions
What was the Ather Energy IPO price band?
₹304–₹321 per share
How much did Ather Energy raise through its IPO?
₹2,981 crore (Fresh issue: ₹2,626 crore; OFS: ₹355 crore)
Why did Ather Energy shares fall after listing?
Aggressive valuation, flat revenue, widening losses, and muted investor demand
Is Ather Energy profitable?
No, the company posted a loss before tax of ₹1,059.7 crore in FY24
How will Ather Energy use IPO funds?
For a new factory, debt repayment, R&D, marketing, and general corporate purposes
