Ather Energy IPO: ‘High risk, high reward bet for long-term investors,’ says Anil Singhvi

The much-anticipated Ather Energy IPO has created a buzz on Dalal Street. Zee Business Managing Editor Anil Singhvi has advised retail investors to tread cautiously.

According to the market guru, while the company shows strong growth potential in the electric vehicle (EV) segment, it is still two years away from full profitability.

"This IPO is more suitable for institutional investors. Low risk-taking retail investors should avoid it for now and look to buy post-listing at better levels," Singhvi said.

Strong growth drivers identified

Singhvi highlighted several positive aspects about Ather Energy:

• Presence of big investors like Hero MotoCorp in the pre-IPO and strong anchor book participation
• Leadership position in the premium electric two-wheeler segment
• Heavy focus on R&D and an asset-light business model
• A young and energetic promoter team with industry experience
• Consistent growth achieved without PLI scheme benefits

Key risks flagged

• While the growth story looks promising, Singhvi pointed out key concerns:
• The company remains loss-making at the EBITDA level
• Negative cash flow of Rs 717 crore reported in December 2024

Borrowings increased to Rs 1,121 crore

Heavy dependence on government subsidies

A highly competitive EV market dominated by large players

"Despite good prospects, the company’s financials indicate that it will take at least two years to turn consistently profitable," Singhvi noted.

Investment advice

Singhvi recommends that only high risk-taking investors should consider applying in the IPO with a two-to-three-year investment horizon. He added that investors should be prepared for volatility and be ready to invest at lower levels post-listing if opportunities arise.

"This IPO is not for short-term listing gains. Long-term conviction and patience will be key," Singhvi emphasised.

The Ather Energy IPO may be buzzy, but as Singhvi says, “the real opportunity might come later.” Long-term investors with strong conviction can consider a staggered approach - but for short-term players, it’s best to stay on the sidelines for now.