The electric vehicle (EV) revolution is well underway in India, with consumer preferences shifting toward clean energy alternatives and the government providing strong policy support for EV adoption. With a strong product lineup, tech-first approach, and aggressive expansion plans, many investors are now asking: Is Ather Energy the next big EV company to watch in the Indian stock market?
India’s electric vehicle (EV) industry is booming, and one company that has caught the eye of investors and consumers alike is Ather Energy. With its focus on electric two-wheelers, Ather has grown rapidly in the last few years, making a significant mark in the Indian market. As the company Ather Energy prepares to launch its Initial Public Offering (IPO), it’s essential for potential investors to understand the key aspects of the offer. Here are five crucial to know before investing in Ather Energy’s IPO.
1. Price Band and Lot Size
Ather Energy, a leading name in India’s electric two-wheeler market, is preparing to launch its Initial Public Offering (IPO), with the subscription window scheduled to open from April 28 to April 30, 2025. The company has fixed the price for its IPO between ₹304 and ₹321 per share. This price range gives investors flexibility when deciding on the appropriate bidding amount. The key consideration for retail investors is the lot size, which has been set at 46 shares per lot. This means that to apply for the IPO, an investor must bid for at least one lot, consisting of 46 shares.
At the upper end of the price band, where the price per share is ₹321, the total investment required for a single lot would amount to ₹14,766. This is an important factor for retail investors who need to evaluate their financial capacity to participate in the IPO. Additionally, with the lot size being fixed at 46 shares, investors can increase their investment by applying for multiple lots, should they wish to expand their exposure to Ather Energy’s stock.
2. Company’s Growth Potential
Ather Energy is a leading electric two-wheeler manufacturer in India, offering premium models such as the Ather 450X and 450S, which have been well-received for their innovative features like fast-charging, connectivity, and high performance. As the Indian government pushes for cleaner transportation solutions, the demand for electric vehicles is expected to surge, especially in urban areas. Ather has a strong brand presence, a growing customer base, and a competitive edge due to its proprietary technology and charging infrastructure.
3. Use of IPO Proceeds
Ather Energy plans to use the funds raised from the IPO to fuel its expansion efforts. A significant portion of the proceeds will go towards ramping up production capacity, building out its charging infrastructure network (Ather Grid), and enhancing its research and development (R&D) activities.These investments will help the company meet the growing demand for electric vehicles and improve IPO its technological capabilities. Understanding how Ather plans to use the IPO funds is crucial for assessing the company’s future growth prospects and how well it can execute its plans.
4. Financials and Profitability
Like many growth-stage startups, Ather Energy has not yet turned a profit. In the fiscal year 2023, Ather reported revenues of around ₹1,800 crore, but it is still grappling with negative margins. However, the company has shown strong revenue growth year-on-year, and as it increases production and optimizes its supply chain, there is potential for improved profitability. Investors need to keep in mind that Ather is still in the phase of scaling its operations, which means it may take a few more years before the company reaches sustainable profitability.
5. Risks Involved
As with any investment, there are risks involved in Ather Energy’s IPO. The electric vehicles market in India is competitive, with major like Ola Electric, TVS, Bajaj, Hero Electric, and others vying for market share. Ather’s ability to maintain its position in the premium segment and capture a larger share of the market depends on factors such as technology innovation, product differentiation, and brand loyalty. Furthermore, while the Indian government offers incentives to promote electric vehicle adoption, any changes in regulatory policies or delays in infrastructure development could negatively affect the industry’s growth and, by extension, Ather’s prospects.
Additionally, the company’s current focus on expansion and product development means that it might face challenges related to supply chain management, cost control, and ensuring a consistent customer experience. Investors should weigh these risks against Ather’s long-term growth potential and make informed decisions.
Conclusion
Ather Energy’s IPO presents an exciting opportunity for investors who are keen on capitalizing on the rapid growth of the electric vehicle sector in India. However, before investing, it’s important to consider the price band, the company’s growth potential, how the funds will be used, its financials, and the risks involved. While Ather has shown promising growth and has a strong product lineup, it’s still in the growth stage and faces the challenges of scaling operations and achieving profitability.
For those willing to take a long-term view and embrace the potential of India’s EV industry, Ather Energy’s IPO could be a solid investment. However, as always, investors should conduct their due diligence and assess their risk tolerance before making any decisions NSE.
