Ather's IPO Receives Subdued Response, Experts Cite Overvaluation Among Concerns Retail investors led the IPO with a 1.78 times subscription, with Qualified Institutional Buyers (QIBs) at a 1.70 times subscription. Only 66 per cent of the allotted portion was subscribed by Non-Institutional Buyers (NIBs). The IPO overall was subscribed by 1.43 times.

Ather Energy's initial public offering (IPO) broke the mainboard inactivity, however, the offering's overall vitals have been fairly subdued. The IPO was fully subscribed on its final day on April 30, but investors have seemed to hold back on participating, with the grey market premium marker hardly showing any activity.

Retail investors led the IPO with a 1.78 times subscription, with Qualified Institutional Buyers (QIBs) at a 1.70 times subscription. Only 66 per cent of the allotted portion was subscribed by Non-Institutional Buyers (NIBs). The IPO overall was subscribed by 1.43 times.

According to Asit C Mehta Investment Intermediaries, Ather's focus on the premium e-2W segment, scope for software monetisation with scale-up and a capital-efficient strategy gives the company an edge and There are levers for improving unit economics driven by new vehicle platforms, reducing the bill of materials, localisation, and operating leverage.

"However, scaling up to adequate volumes is dependent not just on internal strategies, but also on the EV penetration trajectory, which has seen a slower climb in 9MFY25. Increasing EV focus by legacy players such as Bajaj Auto and TVS Motors is heating the competition. This creates uncertainty around the timeline of attaining profitability, even at the EBITDA level," said the market adviser in its IPO note.

The firm also gave a 'Avoid' rating on the IPO of Ather Energy, stating that a wait-and-watch strategy might be more appropriate.

The Deven Choksey Research report also put out an 'Avoid' rating for the issue, citing valuation concerns. As per the report, Ather Energy has been valued at 6x EV/Sales, higher than long-established players such as Bajaj Auto (5.4x), TVS Motor (3.5x), and Hero MotoCorp (2.7x).

Before the opening day, Bajaj Broking, however had recommended subscribing for the long term citing Ather's ability to pioneer new technologies, E-2 wheelers being positioned at a premium price in their respective segments in the market and the company's vertically integrated approach to product design with strong in-house R&D capabilities as some of its core strengths going into the listing.

Ather had also reported losses in all the past three financial years from FY22, with the numbers filed with the Securities and Exchange Board of India for the 9 months of FY25 reporting a loss of INR 577.9 crore.

The Draft Red Herring Prospectus (DRHP) also showed Ather's negative cash flow, possibly having a direct impact on its liquidity. Ather recorded negative cash flow of INR 228.4 crore in FY22, INR 871.3 crore in FY23, INR 267.6 crore in FY24, and INR 717.1 crore in FY25 so far.