Ather, India’s Leading EV Startup, Reduces IPO to $308M While Targeting $1.4B Valuation

Ather Energy, a prominent Indian startup specializing in electric two-wheelers, has recently announced a significant reduction in its initial public offering (IPO) size. The company has decreased its IPO size by 18%, now aiming for a total of 26.26 billion Indian rupees (approximately $308.3 million) as detailed in a draft prospectus filed on Tuesday.

Details of Ather Energy’s IPO

The Bengaluru-based startup confirmed its target post-money valuation at $1.4 billion, a decrease from its earlier valuation goal of between $1.5 billion and $2 billion as reported last September by TechCrunch.

Reasons for the IPO Size Reduction

Ather Energy cited challenging market conditions as the primary reason for adjusting its IPO size and target valuation. Key aspects of the IPO include:

• Reduction in shares offered from 22 million to 11.1 million.
• Bidding for shares is scheduled to open for three days starting April 28.
• Anchor investors are set to participate in a private placement on April 25.

Stakeholders and Share Distribution

Notable shareholders, including Ather co-founders Tarun Mehta and Swapnil Jain, along with the National Investment and Infrastructure Fund Limited (NIIF) and Tiger Global Management’s Internet Fund III, plan to divest portions of their stakes during the IPO. However, Hero MotoCorp, which holds a significant 40% stake in Ather, will retain its shares.

Utilization of IPO Proceeds

Ather Energy has outlined its plans for utilizing the net proceeds from the IPO:

• 9.27 billion Indian rupees ($108.8 million) will be allocated to establish an electric two-wheeler manufacturing facility in Maharashtra.
• 7.5 billion Indian rupees ($88 million) will be invested in research and development initiatives.
• 3 billion Indian rupees ($35.2 million) will be dedicated to marketing strategies.
• 400 million Indian rupees ($4.7 million) will be used to repay existing borrowings.

Ather’s Market Performance

In terms of performance, Ather Energy reported a 21% increase in sales for 2024, achieving a total of 126,353 units sold according to government data. The company secured a 10.7% market share in the electric two-wheeler segment, as stated in the CRISIL Report referenced in the draft prospectus.

Company Background

Founded in 2013, Ather launched its inaugural electric two-wheeler in 2018. The startup reported revenues of 15.79 billion Indian rupees ($185.4 million) for the nine months ending in December, with a net loss of 5.78 billion Indian rupees ($67.8 million) — a notable improvement from a loss of 7.76 billion Indian rupees ($91.1 million) the previous year.

Competition Overview

Ather Energy faces stiff competition from Ola Electric, which held a 34.1% market share last year. Ola Electric made headlines with a record 20% surge during its stock market debut, marking it as the largest listing by an Indian firm in two years. However, its share price has since experienced a decline of nearly 42%, closing at 53.02 Indian rupees as of Tuesday.

For further updates on electric vehicles and market trends, stay tuned to our blog or visit Electrive.