New Delhi, 27 April (IANS). The opening of the subscription of Ather Energy’s Initial Public Offering (IPO) has seen a major decline in its gray market premium (GMP).
According to Investorgandotcom, the GMP of Ather Energy is currently around Rs 3, which is just 0.93 percent more than the issue price.
The GMP was around Rs 17 at the time of the announcement of the IPO of Ather Energy on 22 April, which has now fallen to a single issue.
Electric two-wheeler company has fixed a price band of Rs 304-321 per share for its IPO. Investors will have to apply for at least 46 equity shares.
Ather Energy IPO has a fresh issue of 8.18 crore shares, which has a value of Rs 2,626 crore. At the same time, the offer of sale (OFS) is of 1.1 crore shares. The size of this entire issue will be Rs 2,981 crore.
In this IPO, promoters Tarun Sanjay Mehta, Swapnil Babanlal Jain and other corporate shareholders will sell some part of their stake under OFS.
According to Ather Energy, the amount raised through an IPO will be used to build a new electric two -wheeler manufacturing plant in Maharashtra and to reduce its existing debt.
If the issue price price is fixed at the upper end of the band, then the evaluation of the company is around Rs 11,956 crore.
The company has planned to allocate Rs 750 crore out of the amount received from the IPO for Research and Development (R&D). However, Ather admitted that there is no certainty that this investment would get successful results.
Ather’s business is mainly concentrated in South India.
According to the company’s Red Herring Prospects (RHP), Ather Energy is running in losses. In the financial year 2023-24, Ather Energy recorded a tax-re-deficit of Rs 1,059.7 crore, which was Rs 864.5 crore in FY 23 and Rs 344.1 crore in FY 22.
The company’s income in FY 24 was Rs 1,753.8 crore, which was slightly less than Rs 1,780.9 crore recorded in FY 23.
The company is also facing strict competition in the Indian automobile market, which may put pressure on its pricing capacity and also reduce the profit margin.
-IANS
ABS/
