Ather Energy, the electric two-wheeler manufacturer, had a lackluster debut on the stock market, closing nearly 4% lower on its first day of trading despite a modest listing premium. The stock opened at Rs 328 on the National Stock Exchange (NSE), reflecting a 2.2% gain from its issue price of Rs 321. However, it quickly lost momentum and dropped over 4%, reaching an intraday low of Rs 308.95. This decline came amid weak market sentiment, which overshadowed the initial optimism.
The company’s Rs 2,981-crore initial public offering (IPO) was subscribed 1.43 times, but demand was underwhelming across various categories. Analysts attributed the tepid listing performance to the aggressive pricing strategy, especially when compared to industry peers like OLA Electric.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted that the flat listing was expected due to the valuation being on the higher side. He explained that the electric two-wheeler sector is highly competitive and capital-intensive, with many players—including leaders in the market—still struggling to achieve profitability. Tapse recommended a “HOLD” for risk-taking investors who are comfortable with short- to medium-term volatility but advised conservative investors to wait for more reasonable valuations before investing.
The electric vehicle (EV) two-wheeler space remains in a high-growth phase but is also marked by significant financial challenges, including high burn rates and fluctuating business performance. As a result, stock prices in this sector can be highly volatile.
Ather Energy, founded in 2013, designs its electric scooters in-house and operates over 2,600 charging stations across 300 cities. Its product lineup includes the Ather 450 and the new Ather Rizta, a family-focused electric scooter.
The company plans to use the proceeds from the IPO to fund the construction of a new factory in Maharashtra, pay off existing debt, and boost its research and development (R&D) efforts. However, despite the company's long-term growth potential and strong brand equity, its recent financial performance shows continued struggles. For FY24, Ather reported a net loss of Rs 1,059 crore on revenues of Rs 1,754 crore, with an EBITDA margin of -36%.
While Ather is viewed favorably for its brand strength and future growth prospects, analysts caution that ongoing cash burn, pricing pressures, and fierce competition in the electric two-wheeler sector could lead to further volatility in its stock price in the near term.
