Ather Energy’s IPO Subscribed 1.43x, Lukewarm Response from HNIs
Ather Energy Ltd., an Indian 2-wheeler Electric Vehicle (EV) manufacturer, rolled out its IPO on 28th April 2025 which was open to subscription till 30th April 2025. However, the Rs. 2,981.06 crore IPO garnered a tepid reponse among investors, and was subscribed 1.43 times.
Ather Energy is expected to be listed on the stock exchanges on 6th May 2025.
HNIs Under-subscribed, Better Response by QIBs and Retail Investors
Ather Energy’s IPO was subscribed 0.66x by High Net-worth Individuals (HNIs), who had been offered 14.98% of the total shares in the IPO. However, Qualified Institutional Buyers (QIBs), who were offered 29.97% of the total shares, subscribed to the IPO 1.7 times. Retail investors were offered 9.99% of the total size of the IPO, to which they subscribed 1.78 times. Apart from this, the company’s employees were offered 0.11% of the IPO shares, to which they subscribed 5.43 times.
Remaining 44.95% of the shares of the issue had been offered to anchor investors. Some of the major anchor investors in Ather Energy’s IPO include SBI Small Cap Fund, Aditya Birla Sun Life Flexi Cap Fund, Custody Bank of Japan Ltd., and Abu Dhabi Investment Authority.
Specifics of Ather Energy’s Initial Public Issue
Ather Energy’s IPO was a combination of freshly issued shares and offer for sale of existing shares. Out of the 9.29 crore shares offered, 8.18 crore shares aggregating to Rs. 2,626.30 crore were freshly issued, whereas the 1.11 crore existing shares of the company amounting to Rs. 354.76 crore were offered for sale.
The shares were offered in Rs. 304-321 price band, with each share having a face value of Re. 1. Lot size was defined as 46 shares, which translated to a minimum investment of Rs. 14,776.
Proceeds of IPO to be Used Partly for New Plant in Maharashtra
Out of the proceeds from Ather Energy’s IPO, Rs. 927.20 crore will be used by the company to set up its new electric 2-wheeler plant at Chhatrapati Sambhajinagar, Maharashtra. Out of this Rs. 705.50 crore will be utilised in FY-26 and the remaining Rs. 221.70 crore will be invested in FY-27. Ather Energy’s Red Herring Prospectus (RHP) document mentioned, “We currently depend on our Hosur Factory for the assembly and manufacturing of our electric two-wheelers and battery packs, and any disruptions to the operations of our Hosur Factory could materially adversely affect our business, financial condition and results of operations”.
Apart from this, Ather Energy will use Rs. 750 crore from the net proceeds to fund its research and development (R&D) initiatives over the next three fiscals. About Rs. 270 crore will be used in FY-26, Rs. 265 crore will be used in FY-27, and Rs. 215 crore will be utilised in FY-28.
Moreover, a total of Rs. 300 crore will be spent over FY-26 and FY-27 by Ather towards marketing its products, and Rs. 40 crore of the net proceeds will go towards repayment or pre-payment of debts during FY-26.
Apart from the above-mentioned objects of the IPO, a part of the net proceeds will go towards meeting the company’s general corporate expenses.
About Ather Energy: Bengaluru-headquartered Ather Energy, an Electric Vehicle manufacturing company, was founded in 2013. The company currently operates two manufacturing facilities in Hosur, Tamil Nadu, with one dedicated to battery production and the other to vehicle assembly. During FY-24, the company logged a revenue of Rs. 1,753.80 crore, and for the first 9 months of FY-25, the company’s revenue was reported as 1,578.90 crore.