Ather Energy IPO Day 2: Subscription status, GMP trends, price band to review —Should you apply?

Ather Energy’s preliminary public providing struggled to collect robust investor curiosity on the second day of bidding, with the general subscription reaching simply over 23% as of 11:40 AM on Tuesday, April 29.

Retail buyers led the demand, subscribing 94% of their allotted quota, whereas non-institutional buyers (NIIs) subscribed 19%. The Rs 3,000-crore providing closes on April 30, with itemizing scheduled for Could 6.

GMP slides

Within the gray market, Ather Energy’s unlisted shares have been buying and selling round Rs 322 on Tuesday, reflecting a muted premium of simply Rs 1—or 0.31%—over the higher finish of the price band at Rs 321, in accordance to sources monitoring unofficial buying and selling.Learn Extra: Sensex & Nifty are therapeutic. However will this revive the Rs 2 lakh crore IPO pipeline mendacity in dumps?

The Gray Market Premium (GMP) has weakened steadily. Earlier than the IPO opened, the GMP stood at Rs 7, dropped to Rs 3 by Monday, and slipped additional to about Rs 1 by Tuesday. Market observers attributed the decline to promoting stress on Dalal Avenue final Friday, however famous sentiment might enhance with a market turnaround.

Key supply particulars

Ather Energy’s IPO consists of a recent situation of Rs 2,626 crore and an offer-for-sale (OFS) value Rs 355 crore, with a price band set between Rs 304 and Rs 321 per share. The corporate has already raised Rs 1,340 crore from anchor buyers together with SBI Mutual Fund, Franklin Templeton, and Abu Dhabi Funding Authority.

On the higher band, the electrical two-wheeler maker’s valuation stands round $1.4 billion—a pointy 44% lower from its earlier goal amid cautious international market sentiment.

Proceeds from the recent situation will probably be used for establishing a brand new manufacturing facility in Maharashtra, repaying sure borrowings, and investing in analysis and growth, advertising, and basic company functions.

Additionally Learn: Ather Energy’s Rs 2,981-crore IPO opens for subscription. Ought to you bid amid weak GMP?

Analyst suggestion: Apply or not?

Regardless of the mushy gray market development, analysts stay constructive on Ather Energy’s fundamentals. “On the higher band of Rs 321, the difficulty is valued at a EV/gross sales ratio of 8x, based mostly on 9MFY25 gross sales of Rs 1,579 crore. We’re recommending a Subscribe for itemizing achieve score for this situation,” stated Arihant Capital.

Ather, recognized for its robust in-house R&D and early mover benefit within the premium electrical scooter market, has lately expanded its product lineup with fashions such because the Ather Rizta.

IIT Madras, one in every of Ather’s early backers by means of its incubation arms, holds 15.58 lakh shares and is predicted to realise round Rs 50 crore from the itemizing.

(Disclaimer: Suggestions, options, views and opinions given by the consultants are their very own. These don’t signify the views of Financial Occasions)