The Ather Energy IPO, launched on April 28, 2025, marks a pivotal moment for India’s electric vehicle (EV) industry. As a leading electric two-wheeler (E2W) manufacturer, Ather Energy is capitalizing on the growing demand for sustainable mobility. Backed by Hero MotoCorp and Tiger Global, the company’s public offering is the first major mainboard IPO of the 2025-26 financial year, aiming to raise ₹2,981 crore. This article dives into the details of the Ather Energy IPO, its implications for the EV sector, government policies, global market dynamics, and what investors need to know.
What Is the Ather Energy IPO All About?
Ather Energy, founded in 2013 by IIT Madras alumni Tarun Mehta and Swapnil Jain, designs and assembles electric scooters, battery packs, and charging infrastructure in-house. The IPO, open for subscription from April 28 to April 30, 2025, comprises a fresh issue of ₹2,626 crore and an offer for sale (OFS) of 1.11 crore shares worth ₹354.76 crore. The price band is set at ₹304 to ₹321 per share, with a lot size of 46 shares. Employees receive a ₹30 per share discount, and the IPO is listed on the BSE and NSE.
The company raised ₹1,340 crore from anchor investors, including 36 funds, at ₹321 per share. The IPO’s objectives include funding a new manufacturing plant in Maharashtra, repaying debt, and boosting research and development (R&D). Ather’s valuation at the upper price band is ₹11,956 crore, positioning it as a key player in the competitive E2W market.
| Ather Energy IPO Details | Information |
|---|---|
| IPO Dates | April 28–30, 2025 |
| Price Band | ₹304–₹321 per share |
| Issue Size | ₹2,981 crore (Fresh: ₹2,626 crore, OFS: ₹354.76 crore) |
| Lot Size | 46 shares |
| Valuation | ₹11,956 crore (upper band) |
| Listing Date | May 6, 2025 (tentative) |
| Exchanges | BSE, NSE |
Ather’s flagship products, like the Ather 450X and the family-oriented Rizta, introduced in April 2024, have strengthened its market position. The Rizta offers features like WhatsApp notifications, Alexa voice commands, and 56 liters of storage, setting new benchmarks in the E2W segment.
How Does the Ather Energy IPO Impact the EV Sector?
The Ather Energy IPO is a game-changer for India’s EV industry, which is projected to grow at a CAGR of 44.5% from 2024 to 2030, according to NITI Aayog. As the second pure-play EV manufacturer to go public after Ola Electric, Ather’s listing signals robust investor confidence in sustainable mobility. The company’s focus on premium positioning, vertically integrated engineering, and software-driven ecosystems differentiates it from competitors like Ola Electric, TVS Motor, and Bajaj Auto.
Sectoral Growth Drivers
Ather’s IPO fuels optimism in the E2W market, which saw 47,284 units registered from January to April 2025, an 18% year-on-year increase, per the Vahan portal. Meanwhile, Ola Electric’s volumes dropped by 54%, highlighting Ather’s competitive edge. The IPO proceeds will expand Ather’s Hosur factory, with a capacity of 420,000 vehicles annually, and fund a new Maharashtra facility, boosting production and job creation.
Ripple Effects on Ancillary Industries
The IPO’s success could catalyze growth in ancillary sectors like battery manufacturing, charging infrastructure, and renewable energy. Companies like Amara Raja and Exide Industries may benefit from increased demand for lithium-ion batteries, while charging network providers like Tata Power could see higher partnerships. Ather’s Ather Grid, a fast-charging network, already supports its ecosystem, enhancing consumer adoption.
What Role Do Government Decisions Play in Ather’s Growth?
Government policies have been instrumental in shaping India’s EV landscape, directly impacting Ather Energy’s trajectory. The Ministry of Heavy Industries has rolled out schemes like FAME III and EMPS 2024 to promote EV adoption. However, subsidy reductions have challenged manufacturers. In FY23, Ather received ₹500 crore in subsidies, which dropped to ₹270 crore in FY24 and ₹100 crore in the first nine months of FY25. Despite this, Ather’s CFO noted that subsidies now contribute only 7% to revenue, with cost control and operational efficiencies ensuring resilience.
FAME III and Beyond
The FAME III scheme, launched in 2024, offers incentives for EV purchases and infrastructure development. Ather’s premium scooters qualify for these benefits, though reduced subsidies have pushed the company to optimize pricing. The government’s target of 30% EV penetration by 2030 aligns with Ather’s expansion plans, as outlined in its IPO objectives.
Challenges from Policy Shifts
Recent policy changes, such as stricter localization norms, have increased production costs for EV makers. Ather’s in-house manufacturing mitigates some of these challenges, but reliance on imported components like rare earth magnets remains a concern. CEO Tarun Mehta stated that China’s export curbs on rare earths, reported by
, will have minimal impact due to Ather’s diversified supply chain. Still, investors should monitor geopolitical risks affecting raw material access.
How Does the Global Market Scenario Affect Ather Energy IPO?
The global EV market is a dynamic backdrop for the Ather Energy IPO. In 2025, global EV sales are expected to reach 17 million units, driven by policies in the EU, China, and the US, per the International Energy Agency. However, trade tensions and supply chain disruptions pose challenges.
Opportunities in Global Demand
Ather’s premium E2W offerings align with global trends favoring sustainable urban mobility. Markets like Southeast Asia and Europe, where two-wheeler adoption is high, present export potential. The IPO’s R&D allocation of ₹750 crore will enhance Ather’s ability to develop export-ready models, competing with global players like Super Soco and NIU.
Risks from Trade Policies
US President Donald Trump’s trade talks and China’s stimulus measures, as noted by Business Standard, could influence global commodity prices, impacting Ather’s input costs. India’s stock markets are also sensitive to foreign investor activity, with the Sensex and Nifty tracking global cues. The Ather Energy IPO’s subscription, at 7% on Day 1 with 32% retail participation, reflects cautious optimism amid market volatility.
When Should Investors Consider the Ather Energy IPO?
The Ather Energy IPO’s timing is strategic, breaking a two-month lull in mainboard IPOs. However, investors must weigh opportunities against risks.
Financial Performance
Ather reported ₹1,789.1 crore in revenue for FY24, with a net loss of ₹1,060 crore, per X posts. Losses reflect heavy R&D and marketing investments, but CEO Tarun Mehta projects improved EBITDA margins driven by the Rizta model’s success. The IPO’s EV/Sales ratio of 7.1x (FY24) is considered high, but Ather’s growth phase justifies premium valuations, according to LiveMint.
| Financial Snapshot (FY24) | Amount (₹ Crore) |
|---|---|
| Revenue | 1,789.1 |
| Net Loss | (1,060) |
| Subsidies Received | 270 |
| EBITDA Margin | Improving (projected) |
Grey Market Premium (GMP) Trends
The grey market premium for Ather Energy IPO dropped from ₹40 on April 22 to ₹3 by April 27, signaling investor caution, per CNBC TV18. The estimated listing price is ₹326, a modest 5.3% premium over the upper band of ₹321. Investors should monitor GMP trends closer to the listing date of May 6, 2025.
Analyst Recommendations
Analysts are divided. Zee Business suggests the IPO is attractively priced for long-term investors, given Ather’s innovation and market share gains. However, News18 warns of market volatility and high valuations, advising caution. Consulting a financial advisor, as recommended by ET Now, is prudent.
What Are the Strengths and Risks of Ather Energy IPO?
A SWOT analysis by Kunvarji Wealth Solutions, cited by CNBC TV18, highlights Ather’s position.
Strengths
- Innovation Leadership: Ather’s Atherstack software, with 64 connected features, and Ather Grid enhance user experience.
- Strong Backing: Support from Hero MotoCorp (41.9% stake) and Tiger Global ensures financial stability.
- Market Positioning: Fourth-largest E2W maker by sales volume in FY25, per CNBC TV18.
Weaknesses
- Ongoing Losses: Ather’s ₹1,060 crore loss in FY24 raises concerns about profitability.
- High Valuation: The 7.1x EV/Sales ratio may deter value investors.
Opportunities
- EV Adoption: Government incentives and consumer awareness drive E2W demand.
- Global Expansion: R&D investments could unlock export markets.
Risks
- Competition: Ola Electric, TVS, and Bajaj dominate the E2W space.
- Supply Chain: Dependence on imported components amid global trade tensions.
How Will Ather Energy Shape the Future of EVs?
Ather’s strategic roadmap post-IPO focuses on scalability and innovation. The Maharashtra plant, funded by ₹927.2 crore from the IPO, will boost production capacity. Investments in R&D (₹750 crore) and marketing (₹300 crore) will strengthen Ather’s brand and product portfolio. The company’s resilience against subsidy cuts and supply chain disruptions, as noted by CEO Tarun Mehta, positions it for sustainable growth.
Future Targets by Research Institutes
Analysts have set varied price targets for Ather Energy post-listing, based on its growth potential and market dynamics:
| Research Institute | Target Price (₹) | Timeframe |
|---|---|---|
| Kunvarji Wealth | 380 | 12 months |
| ICICI Securities | 350 | 18 months |
| Motilal Oswal | 325 | 6 months |
Historical Returns Context
As Ather is a new listing, historical stock returns are unavailable. However, peer Ola Electric, listed in August 2024, saw a 20% gain in three months, per NSE. Ather’s focus on premium scooters and software differentiation could yield similar or higher returns, though market volatility remains a factor.
Conclusion
The Ather Energy IPO is a landmark event, signaling India’s EV sector’s maturity. With a ₹2,981 crore issue, Ather is poised to expand production, innovate, and compete globally. Government policies, while challenging, support long-term EV adoption, and global market trends favor sustainable mobility. Investors must balance Ather’s growth potential against risks like competition and high valuations. As India accelerates toward a greener future, Ather Energy is at the forefront, powering the ride ahead.
Disclaimer: The information provided in this article is for educational purposes only and should not be construed as investment advice. Investing in IPOs carries inherent risks, including market volatility and potential loss of capital. Readers are encouraged to consult certified financial advisors before making investment decisions. Past performance and analyst projections are not guarantees of future results.
