Ather Energy’s IPO Performance Analyzed

Ather Energy’s Rs 2,626 crore IPO stands as India’s third-largest public offering of 2025 to date. This offering had all the elements of a major event: a reputable EV brand, a solid engineering background, and a rapidly expanding electric scooter market. However, as the subscription period came to a close, the overall response was underwhelming.

Subscription Rates for Ather Energy’s IPO

Institutional investors showed a subscription rate of just 1.7 times the shares designated for the Qualified Institutional Buyers (QIB) category, while Non-Institutional Investors (NIIs) only subscribed to 66% of their allocated shares. In contrast, retail investors, who generally drive the excitement around IPOs, seemed more engaged, achieving a subscription rate of 1.78 times. This interest might have been influenced by brokerages promoting potential listing gains at the last minute.

Ather’s Brand Strength vs. IPO Attention

Ather Energy is synonymous with robust engineering and top-tier scooters, yet it faced challenges attracting investor attention during its IPO. Many investors felt the absence of a bold and ambitious vision, which was an advantage for competitors like Ola Electric, despite its own shortcomings.

Valuation Adjustments and Investor Sentiment

Before the IPO, Ather had to reduce its expected valuation from $2 billion to $1.4 billion. This adjustment raised eyebrows among investors, as it suggested a lack of demand or confidence, especially in light of the more assertive positioning by rivals such as Ola Electric.

Financial Comparisons with Ola Electric

When examining the financials of both electric vehicle companies, the disparity becomes apparent. Ola Electric, prior to its IPO, reported revenues of Rs 5,000 crore for FY24, coupled with a net loss of Rs 1,584 crore. This meant the company incurred Rs 1.25 in spending for every Rs 1 in revenue. In contrast, Ather Energy disclosed a revenue of Rs 1,579 crore with a loss of Rs 580 crore for the first nine months of FY25, translating to a cost of Rs 1.36 for each Rs 1 earned.

Market Perception of Growth Strategies

The higher cost per unit, coupled with a smaller scale, likely made investors hesitant, especially when evaluating Ather’s route to profitability against Ola’s stronger revenue growth.

Ather’s Expansion Strategy and Market Challenges

Ather’s measured and gradual approach to expansion has fostered significant customer loyalty and trust, but this strategy appears to have backfired in the context of the IPO. Typically, public markets reward quick growth or profitability, and in Ather’s situation, it seems fortunate to have successfully navigated without showing either. This outcome reflects positively on its reputation and potential, bolstered possibly by positive word-of-mouth.

Future Outlook and Investor Patience

Investors may need to exercise greater patience than usual to witness returns from Ather. The founders have exhibited a cautious approach in their claims about potential prospects, standing in stark contrast to Bhavish Aggarwal of Ola Electric. There is hope that this restraint will ultimately yield returns that will satisfy investors in due time.