Strong retail and employee participation help Ather sail through IPO; anchor round valuation places it at a premium to larger rival Ola Electric.
01 May 2025 | 1420 Views | By Autocar Professional Bureau
This is an Autocar Pro Plus article. Subscribe to continue reading.
New-age electric two-wheeler manufacturer Ather Energy has kickstarted India’s FY26 IPO season with a muted yet significant market debut, as its Rs. 2,626 crore public issue was subscribed 1.5 times on the final day—backed largely by retail and employee participation and a decent institutional response amidst volatile markets and geopolitical uncertainties.
The Qualified Institutional Buyer (QIB) segment was subscribed 1.7x, while retail was oversubscribed 1.78x, and employees led the enthusiasm with a 5.43x oversubscription, showcasing internal conviction. In contrast, high-net-worth individuals (HNIs) remained cautious, with below-par subscription in both upper and lower slabs.
Despite tepid HNI demand, retail investors pumped in over Rs. 562 crore, and HNIs contributed around Rs. 309 crore, helping Ather sail through the Rs. 2,626 crore IPO in a cautious market. The IPO sets the tone for India’s primary market recovery and establishes Ather as the first Mainboard IPO of FY26.
Valuation Highlights: Premium Over Bigger Rival Ola Electric
Ather finalized its anchor investor allocation at Rs. 321 per share, raising Rs. 1,340 crore from marquee investors including SBI Small Cap Fund, ADIA, Helios (Sameer Arora), Franklin Templeton, and Aditya Birla Sun Life. At this price, Ather commands a post-money valuation of Rs. 11,956 crore (~$1.4 billion) and a pre-money valuation of Rs. 9,330 crore.
Interestingly, this pricing gives Ather a valuation that is ~55% of Ola Electric’s market cap, even though Ola commands three times the volumes and a 30% market share. The premium valuation signals investor belief in Ather’s superior focus, unit economics, and product-led strategy.
Why Investors Are Backing Ather
Market observers point out that the investor response—particularly from retail—highlights the brand equity Ather enjoys among consumers and the investing public. The anchor book, featuring institutional heavyweights, further validates investor confidence in Ather’s long-term roadmap and the broader EV transition.
Ather’s vertically integrated model, with 55% of its workforce in R&D and nearly 300 patents filed, sets it apart in the crowded EV space. Its in-house product development, control over hardware and software (Ather Stack), and proprietary charging infra (Ather Grid) position it as a future-ready, differentiated player.
Growth, Profitability and Market Expansion
Even in a subsidy-reduced environment, Ather has shown strong financial metrics—19% gross margins in 9MFY25 despite no PLI benefits, signaling a resilient and capital-efficient business model. The recent launch of the Ather Rizta has helped it expand from performance segments to convenience, gaining traction in new geographies like Gujarat, Odisha, Maharashtra, and bolstering its market share in North and West India.
Ather exited April with a 14.5% market share, up from 12% in March, solidifying its position as India's No. 4 electric two-wheeler brand, behind Ola Electric, TVS, and Bajaj. Its aggressive distribution expansion, backed by fresh IPO proceeds, is expected to further unlock scale and profitability.
The Way Ahead
Ather Energy’s IPO has not only reopened the mainboard window but also sent a strong signal to the market: profitability, innovation, and brand strength matter more than just scale. With a differentiated play in India's fast-evolving EV story and investor trust across retail and institutional segments, Ather has laid down a high-quality benchmark for future public listings in the sector.