Ather Energy, a prominent electric two-wheeler manufacturer, has submitted its draft red herring prospectus (DRHP) to the Securities Exchange Board of India (SEBI) for an initial public offering (IPO). Ather aims to become the second electric two-wheeler company to list on the stock exchange, following Ola Electric’s recent public debut.
Ather plans to raise approximately Rs 3,100 crore (around $370 million) through a fresh issue of equity shares and an offer for sale (OFS) of up to 2.2 crore shares. Key stakeholders participating in the OFS include GIC Ventures‘ subsidiary Caladium Investment, which will divest 47.8% of the total OFS, Tiger Global at 18.1%, and 3 States Ventures with 2.18%. Co-founders Tarun Mehta and Swapnil Jain will also contribute by offering 10 lakh shares each. The shares will be issued at a face value of Re 1, with the price band and minimum lot size to be decided in consultation with the book-running lead managers.
Hero MotoCorp, holding a 37.2% stake, is Ather’s largest external shareholder, followed by GIC (Caladium Investment) with 15.04% and the National Investment and Infrastructure Fund (NIIF) at 10.29%. Interestingly, Hero MotoCorp has opted not to participate in the OFS, which has raised questions among market observers. The co-founders of Ather, Tarun Mehta and Swapnil Jain, collectively hold 13.26% of the company.
The funds from the fresh issue will be used for capital expenditure on setting up an electric two-wheeler factory, repaying borrowings, research and development, and marketing expenses. Axis Capital, HSBC Securities, Nomura Financial, and JM Financial are the book-running lead managers for the IPO.
Ather recently achieved unicorn status after securing $71 million from the National Investment and Infrastructure Fund, making it the second unicorn in the electric vehicle sector after Ola Electric. The Bengaluru-based company has raised over $500 million, including $125 million in the last three months alone.
Financially, Ather recorded Rs 339 crore in revenue in Q1 FY25, with a net loss of Rs 183 crore during the same period. For FY24, the company reported revenue of Rs 1,754 crore, reflecting a slight decline. Ather’s customer base grew by 34% to 1,14,000 in FY24, following a 270% increase in FY23. The company also noted that 28% of its raw materials were imported from China in FY24, up from 10% in FY23.
In the competitive landscape, Ather holds a 9% market share in the electric two-wheeler segment as of Q1 FY25, while Ola Electric leads the market with a 49% share. Ola Electric reported Rs 1,644 crore in revenue for Q1 FY25, with a 17% reduction in net loss.