Importance Score: 65 / 100 🔴
Ather Energy, a leading Indian manufacturer of electric two-wheelers, has adjusted the scale of its forthcoming initial public offering (IPO), reducing the target amount by 18%. According to a recent draft prospectus filed on Tuesday, the electric vehicle company now aims to raise 26.26 billion Indian rupees (approximately $308.3 million).
The Bengaluru-based firm has verified that it seeks a post-money valuation of $1.4 billion. This figure represents a decrease from the previously targeted range of $1.5 billion to $2 billion, which the company sought in September of the preceding year.
IPO Reductions Attributed to Market Conditions
Ather Energy cited prevailing market conditions as the primary reason for trimming the IPO value and lowering the target valuation.
Existing stakeholders in Ather are planning to sell 11.1 million equity shares through the offering, a reduction from the 22 million shares indicated in the draft prospectus filed last year. The bidding period for Ather shares is scheduled to commence on April 28 and will remain open for three days. Anchor investors are slated to participate in a private placement round on April 25.
Key Shareholders Participating in the Share Sale
The draft prospectus indicates that several significant investors intend to divest a portion of their holdings during the public offering, including Ather co-founders Tarun Mehta and Swapnil Jain, along with National Investment and Infrastructure Fund Limited (NIIF) and Tiger Global Management’s Internet Fund III. In contrast, the prominent Indian two-wheeler manufacturer Hero MotoCorp, which holds a substantial stake exceeding 40% in Ather, will not tender its shares in the IPO.
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Planned Utilization of IPO Proceeds
Ather has outlined its intended use for the net funds raised from the IPO:
- Infrastructure Development: 9.27 billion Indian rupees (approximately $108.8 million) will be allocated towards establishing a new manufacturing facility for electric two-wheelers in Maharashtra.
- Research and Development: 7.5 billion rupees (approximately $88 million) is designated for investment in research and development endeavors.
- Marketing Initiatives: 3 billion rupees will be directed towards marketing and promotional activities.
- Debt Repayment: 400 million Indian rupees (approximately $4.7 million) will be used to repay existing borrowings.
Performance and Financial Overview
Government data indicates that the company experienced a 21% surge in sales volume in 2024, delivering 126,353 units. During the same period, Ather held a notable 10.7% share of the market for electric two-wheelers, according to a CRISIL Report mentioned in the draft prospectus.
Established in 2013, Ather launched its inaugural electric scooter model in 2018. The company reported generating revenues totaling 15.79 billion Indian rupees (approximately $185.4 million) over the nine-month period ending in December. Concurrently, it recorded a net loss of 5.78 billion Indian rupees for this period, an improvement from the net loss of 7.76 billion Indian rupees (approximately $91.1 million) reported in the corresponding period the previous year.
Market Context: Comparison with Ola Electric
Ather’s competitor, Ola Electric, which held a larger 34.1% market share last year, completed its listing on Indian stock exchanges the previous year. Ola’s stock debuted with a significant 20% increase, marking the most substantial listing surge by an Indian entity in two years. However, its share price has subsequently experienced a decline of nearly 42%, closing at 53.02 Indian rupees on Tuesday.