Notably, institutional investors, including Abu Dhabi’s sovereign wealth fund and Singapore’s Temasek, were allocated shares worth ₹1,340 crore prior to the public offering.
Reuters
Grey Market Premium (GMP) Trends
The Grey Market Premium (GMP) for Ather Energy's IPO has exhibited volatility:
Online Trading Institute
This downward trend indicates tempered investor enthusiasm in the grey market, potentially due to underlying concerns about the company's financials and market position.
Reasons for Investor Caution
Despite the successful subscription, several factors have led investors to approach Ather Energy's IPO with caution:
1. Financial Performance
Ather Energy reported a loss of ₹1,059.7 crore in FY2024, an increase from ₹864.5 crore in FY2023, despite revenues of ₹1,789.1 crore in FY2024. The widening losses raise concerns about the company's path to profitability.
IPO Watch
2. Competitive Market Landscape
The electric two-wheeler segment in India is highly competitive, with players like Ola Electric, TVS Motor, and Bajaj Auto offering aggressive pricing and extensive distribution networks. Ather's relatively higher pricing and limited reach may impact its market share.
Reuters
3. Capital Expenditure Plans
Ather plans to invest ₹927 crore from the IPO proceeds to establish a new manufacturing facility in Maharashtra with an annual capacity of 1 million units. While this expansion is strategic, it adds to the company's capital expenditure and may strain financial resources in the short term.
Inc42 Media
Frequently Asked Questions (FAQs)
Q1: When will the Ather Energy IPO allotment be finalized?
The allotment is expected to be finalized on May 2, 2025.
Q2: What is the expected listing date for Ather Energy shares?
Ather Energy is scheduled to list on the BSE and NSE on May 6, 2025.
Q3: What was the price band for the Ather Energy IPO?
The price band was set between ₹304 and ₹321 per share.
Q4: What is the minimum investment required for retail investors?
Retail investors needed to apply for a minimum of one lot, comprising 46 shares, amounting to ₹13,984.
Q5: Why is the GMP for Ather Energy's IPO declining?
The declining GMP suggests subdued demand in the grey market, possibly due to concerns over the company's financial losses, competitive pressures, and high capital expenditure plans.
Online Trading Institute
Conclusion
Ather Energy's IPO has successfully garnered full subscription, reflecting investor confidence in the company's growth prospects in the electric vehicle sector. However, the declining GMP and underlying financial challenges indicate that investors are proceeding with caution. Potential investors should conduct thorough due diligence and consider long-term prospects before making investment decisions.
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Published on :April 30, 2025 by : PAVAN