Will Ather Energy overcome initial decline to achieve long-term growth?

Synopsis

The stock opened at ₹328 apiece on NSE, logging a 2.2% premium over the issue price. On BSE, the stock opened at ₹326.05, up 1.6%. It ended the circumspect trading session at ₹302.50, down 5.8% below the IPO price of ₹321 apiece.

Mumbai: Ather Energy, the first mainboard listing on BSE in FY26, had a mildly positive start before the electric two-wheeler maker skid 6% on Tuesday, mirroring the broader market weakness that masked the relatively respectable retreat for the biggest gauges.

The stock opened at ₹328 apiece on NSE, logging a 2.2% premium over the issue price. On BSE, the stock opened at ₹326.05, up 1.6%. It ended the circumspect trading session at ₹302.50, down 5.8% below the IPO price of ₹321 apiece.

"The issue opened positively, and I can't ask for more, frankly," Ather's CEO Tarun Mehta told ET on the sidelines of the company's listing ceremony in Mumbai. "Ultimately, the timing really came down to the fact that we are in the midst of a fantastic growth journey right now."

The company's book-built issue was subscribed 1.43 times with qualified institutional buyers (QIBs) coming in on the final day.

Ather launched its ₹2,981-crore public issue between April 28 and 30, after raising ₹1,340 crore from anchor investors on April 26.

Mehta said the company is scaling up using a capex-light retail model, and is tapping into India's expanding base of value-conscious upgraders.

"This (growth) is only with 260 stores pan-India, while our peers are operating with a very large number of stores. So, as we start unlocking new dealerships and we let our new products grow, I think the growth in the near term is going to be fantastic," he added.

Discussing the company's capital expenditure approach, Mehta said the company has always been cautious with cash deployment, focusing investments in areas such as R&D and brand-building while avoiding capital-heavy verticals such as company-owned retail outlets or cell manufacturing.

This "capital discipline", he added, would remain core to the company's operating DNA.

Of the net proceeds from the IPO, ₹927.2 crore will be used to fund Ather's new manufacturing plant in Chhatrapati Sambhajinagar (formerly Aurangabad), Maharashtra, the company said in its issue prospectus. It has earmarked ₹750 crore for R&D, ₹300 crore for marketing, and ₹40 crore for debt repayment. These funds will be deployed over FY26 to FY28.

According to the state-run Vahan data, Ather held a 14.3% share of the electric two-wheeler market in April 2025, behind TVS Motor, Ola Electric, and Bajaj Auto.

Mehta said Ather would seek to go beyond the premium segment.

"Our bet is that our strategy of focusing on the upgrading Indian customer will pay off big dividends," Mehta said.

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