Mumbai— Bengaluru-based electric two-wheeler manufacturer Ather Energy is set to debut on Indian stock exchanges on Tuesday, but early indicators suggest a subdued listing. Market watchers cite a weakening grey market premium (GMP) and tepid investor response as key reasons for the muted sentiment.
As of Monday, Ather’s shares were trading at a GMP of just Rs 7 above the IPO’s upper price band of Rs 321, signaling a modest listing gain of approximately 2.2%, according to data from InvestorGain.com. The GMP has steadily declined over the past week, dampening expectations for a strong opening.
The company’s Rs 2,981 crore initial public offering (IPO), which was open for subscription from April 28 to April 30, saw only moderate demand. The issue was subscribed 1.43 times overall, with retail investors subscribing 1.78 times and qualified institutional buyers (QIBs) 1.70 times. However, non-institutional investor (NII) participation lagged at just 0.66 times. The employee quota stood out, receiving 5.43 times subscription.
Backed by marquee investors such as Tiger Global, Ather Energy finalized share allotments on May 3, with shares credited to investors’ demat accounts on Monday. Refunds for unsuccessful applicants were also processed.
The proceeds from the IPO will fund Ather’s growth plans, including Rs 927.2 crore earmarked for a new EV manufacturing facility in Maharashtra. Additional allocations include Rs 300 crore for marketing and brand development, Rs 50 crore for R&D, and Rs 40 crore for debt repayment.
Despite being among the pioneers in India’s electric vehicle space, Ather has yet to turn a profit. Founded in 2013 by Tarun Mehta and Swapnil Jain, the company has reported losses every financial year. Its red herring prospectus does not outline a clear path to profitability or cost efficiency.
As Ather gears up for its public debut, analysts say the lackluster GMP and subdued subscription figures reflect broader investor caution amid ongoing concerns about valuation and profitability in the EV sector. (Source: IANS)
