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Indian e-scooter maker Ather Energy fell on its $352mn stock market debut as investors poured doubts on the unprofitable sector amid a wider drought in domestic listings.
Ather’s shares dropped more than 4 per cent in Mumbai trading on Tuesday, reversing earlier opening gains. The Bengaluru-based company only just oversubscribed an initial public offering, with anchor investors that included the Abu Dhabi Investment Authority.
Ather was founded in 2013 and, as one of India’s first electric two-wheeler start-ups, its founder has claimed the company’s fast charging and advanced technological features have made it the “Apple” of the Indian e-scooter market.
But Ather commanded only a 15 per cent market share of the e-scooter market in the March quarter, lagging behind its established rivals, including TVS Motor and Bajaj Auto, who have ridden ahead in part due to industry-wide discounting.
“It’s becoming more crowded now and there’s intense competition,” said Kranthi Bathini, director of equity strategy at WealthMills Securities in Mumbai. “Investors are very selective in choosing IPOs.”
Volume growth of e-scooters in India is expected to jump 25 per cent in the financial year through March 2026 after crossing 1mn units — or 6 per cent of the total two-wheeler market — last year, according to Crisil, an Indian rating agency owned by S&P Global.
But following the Indian government’s reduction of industry subsidies last year, Crisil expects it will take some manufacturers about three years to break even, with the average loss per vehicle at pure e-scooter companies estimated to be up to Rs30,000 ($355).
Mumbai-based SBI Securities recommended investors avoid Ather’s debut, pointing to the company’s lack of profitability and growing competition.
Ather’s listing follows the high-profile IPO in August of sector leader Ola Electric, which has since struggled with a fall-off in sales, along with customer complaints and regulatory scrutiny over its bikes. Ola’s shares have tumbled 43 per cent so far this year.
Earlier, investment bankers had expected that 2025 would follow the previous year’s Indian IPO bonanza. Companies including Hyundai’s Indian unit rushed to market in 2024 to benefit from a soaring stock market and juicy equity valuations as millions of households punted their savings into local funds.
But a spate of awaited $1bn-plus listings, including the flotation of the Indian arm of South Korea’s LG, have been put on hold, as US President Donald Trump’s trade war further clouds an already patchy picture in India.
The benchmark BSE Sensex and Nifty 50 indices remain below their peaks seen back in September, after a slowdown in corporate earnings and a wider downturn for the Indian economy.
India registered $6bn worth of equity capital market deals in the first quarter of 2025, a plunge from $15.9bn in the same period a year ago, according to Dealogic data. There have been 41 IPOs in the first four months of 2025, half the amount of a year ago.
“There’s uncertainty because of the tariffs and geopolitical tensions,” said Bathini. “Which is why investors are staying away.”
Devarajan Nambakam, co-head of India investment banking at Goldman Sachs, said there had been “some foreign institutional outflows and a degree of valuation correction”.
“Every now and then, whether due to an event inside or outside India, the market takes a necessary pause to reassess,” he said, adding that Goldman Sachs was still working with clients “very actively” on IPOs.
