Ather Energy to launch its IPO: Buzz on Dalal Street

The initial public offering (IPO) of electric 2-wheeler manufacturer Ather Energy is scheduled to launch on April 28 and has already generated a lot of excitement on Dalal Street

Even though the company hasn't reported a profit since its founding in 2013, its co-founders Tarun Sanjay Mehta and Swapnil Babanlal Jain stand to benefit greatly from the IPO.

The founders of Ather Energy will sell 19.60 lakh shares in the ₹2,981 crore IPO, which has an offer for sale part of around ₹355 crore.

The issue price of each share of the offering is between ₹304 and ₹321. Meanwhile, the founders' weighted average acquisition cost was ₹21.09 per share. Given that the company's shares are listed at the upper end of the ₹321 price range, their investment in Ather Energy will yield multi-bagger returns of 1,422%.

Ather Energy, on the other hand, has continuously been a losing business even though it is a well-known brand in the EV two-wheeler market, holding an 11.5% market share as of the fiscal year 2024 (FY24) and ranking third in terms of volume.

In its RHP, Ather stated that its sales growth in FY24 was flat and that the business has lost money since its establishment. "There is no assurance that we will be cost-effective in our operations or achieve profitability in the future," the RHP for the business states.

Before taxes, Ather's loss in FY24 was ₹1059.7 crore, which was much more than the ₹864.5 crore in FY23 and the ₹344.1 crore in FY22. Additionally, it reported sales of ₹1753.8 crore in FY24 as opposed to ₹1780.9 crore in FY23, indicating sluggish revenue growth.

On Wednesday, April 30, Ather Energy's three-day initial public offering (IPO) will shut for subscriptions. Both the National Stock Exchange and the BSE are expected to list shares.