Ather IPO Hype: How IPO Marketing Traps Retail Investors?

You’ve probably seen the buzz — news headlines, social media posts, and expert tips hyping the Ather IPO. But when the dust settled, the reality turned out to be quite different. Despite all the noise, retail investors didn’t rush to buy Ather shares, and the IPO barely scraped through on the final day. 

So what went wrong? And more importantly, how did the Ather IPO hype turn into a subtle trap for retail investors like you?

Let’s break it all down — from the shaky fundamentals to the suspicious marketing tactics — so you can learn how to spot red flags before investing in any IPO. 

What Sparked the Ather IPO Hype?

Ather Energy, known for its premium electric scooters, had the perfect pitch. It was in the booming EV sector, backed by names like Hero MotoCorp, and had futuristic tech appeal.

On paper, it was the kind of IPO that should have flown off the shelves.

But what really happened?

• Day 1 Subscription: Just 16%
• Day 2 noon: Barely 22%
• Day 2 close: A modest 28%

It was only on Day 3 that things picked up — and not organically. Something fishy started to unfold.

The Sudden Surge: A Coordinated Marketing Push? 

Let’s pause for a second and look at what happened on Day 2 of the IPO.

Out of nowhere, three major brokerages — Arihant, Ventura, and Nuvama — published reports recommending a “Subscribe for Listing Gains.” But here’s the kicker- all three reports came out within just 40 minutes of each other. 

Even more strangely, all reports made the same two points-

1. Ather’s “growth potential”
2. Margin improvements from 7% in FY24 to 19% in the first 9 months of FY25.

That’s it. No deep analysis. No new insights. And only The Hindu BusinessLine covered all three — while every other major media outlet stayed silent. 

These reports were even tagged as AI-generated content, possibly to dodge accountability.

Coincidence? Or a coordinated push to salvage a failing IPO?

The Real Reasons Behind Investor Reluctance

While the Ather IPO hype was artificially inflated at the last minute, the fundamentals told a different story. Here are 5 reasons why investors were cautious- 

Expensive Valuation

Ather was valued at 6x EV/Sales, which is higher than its established peers- 

Experts, like Deven Choksey Research, gave an Avoid Rating due to these inflated valuations. 

Consistent Losses

Despite the buzz, Ather hasn’t turned a profit in the last three years. Here’s a look at the red ink-

The path to profitability looks long and uncertain.

Negative Cash Flow

Ather’s operations are burning cash — not generating it.

This consistent negative cash flow raises serious liquidity concerns.

Fierce Competition 

Ather was an early mover, but its market share is stagnant:-

• FY24: 11.5%
• 9MFY25: 10.7%

With rivals like Ola Electric, TVS iQube, and Bajaj Chetak aggressively expanding, Ather is losing its edge.

Dependency on Government Policies 

Ather relies heavily on government subsidies like the PM eDrive scheme. Any rollback in incentives can hurt pricing and consumer demand.

So, Was the Ather IPO Hype a Trap?

Let’s call it what it looks like — a subtle trap. Here’s the sequence-

• IPO response was sluggish
• Brokerafes rushed in with identical reports 
• The media largely stayed silent, except for one outlet
• Investors were nudged into subscribing based on “listing gains” promises 
• AI disclaimers helped avoid accountability

This kind of marketing, wrapped in the name of “research,” is how the Ather IPO hype misled retail investors who often depend on brokerage reports to make decisions. 

The Aftermath: What Now? 

Ather shares are set to list on May 6, and current indicators suggest the listing will hover around the issue price of Rs.320. So much for those listing gains, right? 

While the retail portion was subscribed 1.89 times, the overall enthusiasm was tepid. Many retail investors may find themselves holding onto shares with minimal upside, or worse, losses, soon after listing. 

Ather shares are set to list on May 6, and current indicators suggest the listing will hover around the issue price of Rs 320. 

So much for those listing gains, right?

Lesson for You: Don’t Fall for the Hype 

Here’s what the Ather IPO hype teaches us:-

Always Read the DRHP 

Don’t rely solely on flashy brokerage reports. Go through the DRHP (Draft Red Herring Prospectus) to check the company’s financial health.  

Compare Valuations 

Use simple benchmarks like EV/Sales or P/E ratios to compare with industry peers.

Check Media Patterns 

If only one outlet is promoting something, and others are quiet, ask why.

Beware of “Listing Gains” Tag 

This is often a marketing tactic to push demand artificially. 

Look at Market Share and Profit Gains

If a company can’t grow market share or profits consistently, it’s a red flag.  

Note: Do you know about the new NSE rules? If not, then go through the article- “Reasons behind the success of Indian SME IPOs? New NSE Rules.”

Final Words: Stay Smart, Stay Safe 

The Ather IPO hype might soon fade, but its lessons are here to stay. In today’s market, where retail investors are often treated as easy targets, it’s crucial to question the narrative.

Don’t let fancy words like “EV boom” or “green energy future” cloud your judgment. Look at the numbers, the timing, and the motivation behind recommendations.

Because in the end, it’s your money on the line.