Ather Energy Shares Slip 5% Post Lukewarm Market Debut

Bengaluru, May 6, 2025 — Ather Energy, the Bengaluru-based electric scooter manufacturer, experienced a tepid debut on the Indian stock exchanges today. Despite initial optimism, the company's shares opened at ₹328 on the NSE, a modest 2.18% premium over the IPO price of ₹321. However, the stock soon reversed gains, slipping over 5% to trade around ₹311.35 by mid-morning .(Financial Times, mint)

Market Debut: A Modest Start

The ₹2,981 crore IPO, which was subscribed 1.43 times, had generated moderate interest among investors. While the Qualified Institutional Buyers (QIB) and retail investor segments saw decent participation, the Non-Institutional Investor (NII) category lagged . Analysts had anticipated a subdued listing, given the aggressive pricing and prevailing market conditions.(Business News Today, mint)

Investor Sentiment and Sector Challenges

Ather's lackluster debut reflects broader concerns in the electric vehicle (EV) sector. The company, despite being a pioneer in India's premium e-scooter market, faces stiff competition from established players like Ola Electric, TVS Motor, and Bajaj Auto. Additionally, the sector grapples with challenges such as high capital expenditure, supply chain dependencies, and the gradual reduction of government subsidies .(Evrim Ağacı, Reuters, Financial Times)

Financially, Ather reported a loss before taxes of ₹1,059.7 crore in FY24, up from ₹864.5 crore in FY23. Revenue remained flat at ₹1,753.8 crore, indicating pressure on profitability .(mint)

Analyst Perspectives

Market experts suggest that Ather's future performance will hinge on its ability to scale operations and achieve profitability. Avinash Gorakshakar, Head of Research at Profitmart Securities, noted that the listing was in line with expectations, given the aggressive IPO pricing. He emphasized that future stock movements would depend on the company's volume growth and profitability metrics .(mint)

Similarly, Vinit Bolinjkar, Head of Research at Ventura Securities, highlighted the importance of strategic partnerships and valuation adjustments for a smoother market performance .(mint)

Company Outlook

Ather plans to utilize the IPO proceeds to establish a new manufacturing facility in Maharashtra, invest in research and development, and expand its marketing efforts. The company aims to strengthen its product portfolio with new platforms, including the EL scooter and Zenith motorcycle, and deepen its distribution network across India .(mint)

CEO Tarun Mehta remains optimistic about the company's growth trajectory, projecting improved margins, volumes, and market share in FY26 .(mint)

Ather Energy's stock market debut underscores the cautious investor sentiment towards the EV sector amid profitability concerns and intense competition. While the company's technological prowess and strategic initiatives offer long-term potential, achieving sustainable profitability will be crucial to gaining investor confidence.