Ather Energy IPO: Lower Cash Burn Gives Edge Over Ola, Weak Northern Presence a Concern

Ather IPO: The electric two-wheeler (E2W) manufacturer is all set to make its Dalal street debut in the coming months. While the company has a well-established position in the EV market, Ather has struggled to get its hand on market share as it has remained within a narrow range of 8 per cent-12 per cent.

One of the major reasons, Ather has been facing hurdles in the EV market is because of the presence of already well-established players in the market like Ola Electric, Bajaj Auto and TVS Motors.

For the EV manufacturer, expansion in the northern part of the country is likely to be a major priority. "Ather has a strong market presence in urban-heavy states such as Karnataka, Kerala, Tamil Nadu, Gujarat and Andhra Pradesh (68 per cent of FY24 sales were from the South, per DRHP). Ather’s low single-digit share in states such as Bihar, Uttar Pradesh, West Bengal and Odisha indicates the need to expand presence in such states," Elara Securities said in its report.

The Ola Rival

While Bajaj Auto and TVS Motors have witnessed a steady increase in market share, Ola Electric continues to have a lion's share in the EV market. The Bhavish Aggarwal-owned company made its D-street debut in August month and witnessed a robust listing. However, the shares of the company experienced a sharp slump of over 13 per cent last month.

As for Ather, the brokerage house highlighted in its report that the company offers multiple high-quality products with a premium positioning and holds a strong market presence in some southern states. Most importantly, the company has a lower cash burn rate as compared to Ola.

However, the absence of PLI benefits can put it at a pricing and margin disadvantage as compared to its competitors. The brokerage firm also pointed out that Ather's growth has been slower despite being an early player in the electric two-wheeler market.