Investors look towards Ather Energy IPO listing as stocks credit to demat today with weak GMP premium signals.
The long-awaited Ather Energy IPO listing is coming tomorrow, Tuesday, May 6. The allotment ended last Friday, May 2, and applicants who got allocations are getting shares credited to their demat accounts today, Monday, May 5. Refunds to unsuccessful applicants are also being issued today.
Good Retail Demand but Lackluster Overall Demand
Ather Energy’s IPO elicited significant retail excitement, ending with a retail subscription of 1.78 times. Qualified Institutional Buyers (QIBs) were not far behind at 1.70x subscription, with Non-Institutional Investors (NIIs) ending at a moderate 66%. Employees led the pack with a high of 5.43 times, indicating strong confidence within.
Even with these figures, doubts remain over the IPO’s real demand quality. On the last subscription date, QIBs apparently filled in to support the issue, casting doubts on widespread investor demand. According to Prashanth Tapse, Senior Vice President of Research at Mehta Equities, the IPO can expect a flat or slightly negative listing, with price movements likely to remain within ±5%.
IPO Structure and Allotment Breakdown
Ather Energy reserved at least 75% of the share for QIBs, 15% maximum for NIIs, and 10% at most for individual investors. Employees had a 100,000 share reserve fixed for them as well, besides getting a discount of ₹30 per share.
The IPO price band was between ₹304 and ₹321 per equity share of face value Re 1 each. Interestingly, this issue was supported by key investor Tiger Global, lending strength to its marketability.
GMP Analysis: What the Grey Market Is Saying?
Up to today, grey market premium (GMP) of Ather Energy IPO is ₹7, indicating that stocks are likely to list at about ₹328, which is a mere 2.18% higher than the higher IPO price of ₹321.
But the trend indicates a slowing momentum in GMP, with a high of ₹17 and a low of ₹0.00 being seen in the last 14 sessions. This fall indicates declining confidence in post-listing appreciation, and investors can expect a cautious debut.
The GMP, though useful, is not a formal market indicator. It only indicates investor sentiment and readiness to pay a premium over the issue price in unregulated market transactions.
IPO Objective and Capital Deployment
The issue size comprises a new equity issue of ₹2,626 crore and an offer-for-sale of 1.1 crore equity shares. Major sellers are:
- National Investment and Infrastructure Fund II
- Internet Fund III Pte. Ltd
- IITM Incubation Cell
- IITMS Rural Technology and Business Incubator
Co-founders Tarun Sanjay Mehta and Swapnil Babanlal Jain
The proceeds will be utilized prudently, including:
- ₹927.2 crore towards constructing a new electric two-wheeler plant in Maharashtra
- ₹750 crore towards R&D projects
- ₹300 crore towards marketing campaigns
- ₹40 crore towards retiring existing debt
The investment pattern extends over the three fiscal years from 2026 to 2028, towards long-term infrastructure and brand building.
Major Players behind the IPO Management
The IPO of Ather Energy is handled by a seasoned set of financial institutions:
- Axis Capital Limited
- HSBC Securities & Capital Markets Pvt Ltd
- JM Financial Limited
- Nomura Financial Advisory and Securities (India) Pvt Ltd
Meanwhile, Link Intime India Pvt Ltd is acting as the official allotment registrar and investor services.
What to Expect on Listing Day?
Considering the moderate GMP, confused investor sentiment, and institutional support at the last minute, the listing is expected to be subdued. Although the long-term vision of Ather Energy is bright, especially in the electric vehicle segment, short-term market responses could be subdued.
Investors looking to trade on listing day should consider exit strategies for quick gains or prepare for slight volatility. For long-term holders, Ather’s strategic capital deployment could yield strong returns if execution matches ambition.
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