Ather Energy IPO: Price Band, Allotment, Listing Date, Financials, Risks And More — DRChoksey's Analysis

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DRChoksey Report

Ather Energy Ltd.'s initial public offering opens today and the offer close for subscription on April 30. The Bengaluru-based electric two-wheeler company has fixed the price band in the range of Rs 304 to Rs 321 per share.

The Rs 2,980.7 crore IPO comprises of both fresh shares worth Rs 2,626 crore, and an offer for sale worth Rs 354.8 crore.

The shares will be listed on both the National Stock Exchange and the BSE on  May 06, 2025.

The allotment for the Ather Energy's IPO is expected to be finalized on May 02.

Objects of the Offer

• Capital expenditure to be incurred for establishment of an E2W factory in Maharashtra.

• Repayment/ pre-payment of certain borrowings availed by the Company.

• Investment in research and development.

• Expenditure towards marketing initiatives.

• General corporate purposes.

We believe that Ather Energy is well-placed to capitalize growth in E2W Industry led by strong DNA of innovation and engineering, but the path to profitability seems long and full of challenges.

Although, Ather “Rizta” and to be launched “EL platform” are expected to play a pivotal role in solidifying its market position, the company’s future depends on ramp-up of vehicle volumes from existing and new product launches, gross margin improvement led by further cost reduction, and the ability to withstand competitive pressures from both E2W and ICE 2W OEMs.

Ather is currently offered at a EV/Sales valuation of ~6x, which appears overvalued to us. We assign a “Avoid” rating and believe that it can be bought at attractive valuation in the secondary market.

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