Synopsis
Ather Energy's IPO launch didn't meet expectations, attracting only a fraction of subscriptions. With a dwindling grey market premium and mixed responses from investors, the company's financial struggles raise questions about its future in the electric vehicle market.Key Takeaways
- Ather Energy's IPO was subscribed only 0.17 times on Day 1.
- The grey market premium has significantly dropped to Rs 1.
- The retail investor segment saw a subscription rate of 0.62 times.
- Ather plans to raise Rs 2,981 crore from the IPO.
- The company has been incurring annual losses.
New Delhi, April 28 (NationPress) The initial public offering (IPO) of electric two-wheeler manufacturer Ather Energy Limited encountered a tepid response on its inaugural day of subscription, with the overall issue being subscribed merely 0.17 times.
The grey market premium (GMP) for Ather Energy has also significantly decreased, reflecting diminished investor enthusiasm.
Currently, the GMP stands at approximately Rs 1, indicating a minimal premium over the issue price, as reported by InvestorGain. Initially, when the IPO was announced, the GMP was around Rs 17.
The segment for retail investors fared somewhat better, achieving a subscription rate of 0.62 times. In contrast, non-institutional investors (NIIs) subscribed to 0.16 times of their allotted quota, whereas the employee segment was subscribed 1.77 times.
Notably, there was no engagement from qualified institutional buyers (QIBs) on the opening day. The IPO is scheduled to remain open for subscription until April 30.
Ather Energy is aiming 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 valued at Rs 354.75 crore.
Investors can place bids for a minimum of 46 shares per lot.
From the Rs 2,626 crore fresh issue, Ather plans to allocate Rs 927.2 crore for constructing a new electric two-wheeler manufacturing facility in Maharashtra.
Additionally, Rs 750 crore is designated for research and development, Rs 300 crore for marketing, and Rs 40 crore for debt repayment.
On Friday, the company secured Rs 1,340 crore from anchor investors, including several notable names. However, this did not significantly enhance demand on the initial day of public subscription.
Ather Energy's financial reports indicate the company has been incurring losses annually. In FY24, it reported a pre-tax loss of Rs 1,059.7 crore, exceeding the Rs 864.5 crore loss recorded in FY23.
The revenue for FY24 was Rs 1,753.8 crore, slightly less than the FY23 revenue of Rs 1,780.9 crore.
