Market entrance sees Ather Energy, an Indian e-scooter manufacturer, experiencing a dip in share prices following its initial public offering (IPO).
Revised Article:
Plunging Stocks: Ather Energy's Market Debut Dragged Down Amid Fears of Intense Competition in the Electrified Two-Wheeler Market
It was a bumpy start for Ather Energy on Tuesday as their shares took a 3.3% plunge in their market debut, erasing initial gains after opening, due to concerns about their ability to navigate the fiercely competitive electric two-wheeler industry. The stock opened at 328 rupees on the National Stock Exchange of India, inching 2% above the offer price of 321 rupees, but slipping into the red. As of 10:44 a.m. IST, the stocks were trading at 310.40 rupees, valuing the company at roughly $1.37 billion.
Ather's IPO, a whopping $352 million deal, was steamrolled to the finish line by institutional investors, marking a significant test for India's ailing IPO market. However, the overall IPO proceeds in India have plummeted by 15% in 2025, according to LSEG data, as investors grappled with apprehensions over slowing economic growth, shifting tariffs, and recent geopolitical turmoil.
Ather, one of the pioneers in selling e-scooters in India since 2018, had scaled back its IPO size by about 15% and shaved off 44% from its targeted valuation. Prashant Tapse, an analyst with Mehta Equities, weighed in, stating, "The electric two-wheeler segment is a hotly contested battleground that's both capital-intensive and fraught with profitability issues. Even the market leader is finding it challenging to sustain profitability." Tapse further commented, "Given the underwhelming post-listing performance of rival Ola Electric, the flat listing for Ather feels justified." Ola Electric, which made its market debut last August, has seen its shares slip by a staggering 36% since then.
Ather's chief executive officer characterizes their tech-laden scooters as the "Apple of electric two-wheelers" and is banking on newer models to usher in profitability and close the gap with competitors. The Bengaluru-based company, as detailed in their prospectus, intends to employ the majority of the IPO proceeds towards constructing a third factory and investing in research and development.
Insights
- Competitive Landscape: Ather Energy and Ola Electric, two major players in the Indian electric two-wheeler market, face stiff competition from numerous players, including the market leader.
- Product Diversification: Ather Energy aims to diversify its offerings from scooters to new platforms like EL for scooters and Zenith for motorcycles. Ola Electric, while yet to deliver any motorcycle units, also seeks to enter the motorcycle segment.
- Market Perception: Ather Energy is perceived as a premium brand, emphasizing quality, innovation, and a cutting-edge ecosystem. Ola Electric, despite leading in sales volume, faces challenges related to debt and questionable expansion strategies.
- Financial Performance: Ather Energy listed with a premium compared to its IPO issue price, indicating strong investor confidence in the company's potential growth. Ola Electric, however, struggles with a significant debt burden.
- The competitive landscape in the Indian electric two-wheeler market is intense, with Ather Energy and Ola Electric facing stiff competition from various players, even the market leader.
- Ather Energy intends to diversify its offerings from scooters to new platforms such as EL for scooters and Zenith for motorcycles, aiming to usher in profitability and close the gap with competitors.
- Ola Electric, while yet to deliver any motorcycle units, also seeks to enter the motorcycle segment, but faces challenges related to debt and questionable expansion strategies.
- Ather Energy is perceived as a premium brand, emphasizing quality, innovation, and a cutting-edge ecosystem, which could contribute to its potential growth.
- Ather's IPO was significantly oversubscribed, indicating strong investor confidence, despite the company listing at a premium compared to its IPO issue price.
- In contrast, Ola Electric's shares have fallen by a staggering 36% since its market debut last August, raising concerns about its financial stability and viability in the competitive market.
