Ather Energy IPO sees muted response on Day 1, GMP also falls

New Delhi, April 28 The initial public offering (IPO) of electric two-wheeler maker Ather Energy Limited received a lukewarm response on its first day of subscription, with the overall issue being booked just 0.17 times.

Ather Energy’s grey market premium (GMP) had also slipped sharply, indicating subdued investor interest.

The GMP had fallen to just about Rs 1, suggesting a very small premium over the issue price, according to InvestorGain. When the IPO was first announced, the GMP was around Rs 17.

The retail investors' portion saw a better response, getting subscribed 0.62 times. Non-institutional investors (NIIs) booked 0.16 times of their allocated quota, while the employee portion was subscribed 1.77 times.

However, there was no participation from qualified institutional buyers (QIBs) on the opening day. The IPO will remain open for subscription till April 30.

The company is looking to raise Rs 2,981 crore through the IPO, which includes a Rs 2,626-crore fresh issue and an offer-for-sale (OFS) of 1.1 crore shares worth Rs 354.75 crore.

Investors can bid for a minimum of 46 shares per lot.

Out of the Rs 2,626 crore fresh issue, Ather plans to use Rs 927.2 crore to set up a new electric two-wheeler manufacturing facility in Maharashtra.

Another Rs 750 crore is earmarked for research and development, Rs 300 crore for marketing, and Rs 40 crore for repaying debt.

The company had raised Rs 1,340 crore from anchor investors on Friday, which included several big names. However, this could not fully boost the demand on Day 1 of public subscription.

Ather Energy’s financials show that the company has been making losses every year. In FY24, it reported a pre-tax loss of Rs 1,059.7 crore, higher than the Rs 864.5 crore loss in FY23.

Its revenue for FY24 was Rs 1,753.8 crore, slightly lower than the FY23 revenue of Rs 1,780.9 crore.

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