Ather Energy IPO fully subscribed on Day 3; Check GMP, IPO allotment dates and 3 reasons why investors are cautious- Highlights

Ather Energy IPO Day 3 Subscription Status Live Updates: Ather Energy’s IPO has entered its final stretch, and the overall subscription remains tepid. By Day 2, the issue was subscribed just 0.30 times, driven largely by retail participation, which stood at 1.20 times. However, institutional appetite is yet to pick up, with the QIB portion still untouched and the NII category subscribing just 0.28 times. The EV maker aims to raise around Rs 2,981 crore through the public offer, which includes a fresh issue of 8.18 crore shares and an offer for sale of 1.1 crore shares.

Ather Energy IPO: 3 crucial concerns

Brokerages are not too enthused about the Ather Energy IPO. Many have recommended cautious or Avoid rating on the back of the following reasons-

1. Issue overvalued: According to Deven Choksey Research, the Ather IPO is currently offered at a EV/Sales valuation of 6x. This according to them, “appears overvalued. We assign ‘Avoid’ rating and believe that it can be bought at attractive valuation in the secondary market.”

2. Supply Chain worries: Ather Energy relies on imports from countries like China for its EV components. The street is worried about impact of regulatory or policy changes. Moreover, any disruption in the supply, pricing of lithium-ion cells is seen as a key risk that could impact the company’s operation.

3. Competition worries: Many brokerages also highlighted the growing competition in the electric two-wheeler space and the relative valuation of Ather Energy issue. They seen need for further rationalisation.

Ather Energy IPO: Investor details

The book-building issue will offer 8.18 crore fresh shares and 1.11 crore promoters’ shares. The allotment for the IPO is expected to be finalised on May 2. As per the tentative schedule, the shares of Ather Energy might the D-Street (NSE and BSE) on May 06. Axis Capital, HSBC Securities & Capital Markets, JM Financial, and Nomura Financial Advisory And Securities (India) are the lead book runners of the issue, with Link Intime India working as the registrar.