Ather Energy, an Indian electric two-wheeler manufacturer based in Bengaluru, has revised its initial public offering (IPO) size, reducing it by 18% to 26.26 billion Indian rupees (approximately $308.3 million), as detailed in a recent draft prospectus. The company aims for a post-money valuation of $1.4 billion, a decrease from its earlier valuation target of between $1.5 billion and $2 billion set last September.
The decision to adjust the IPO size and valuation is attributed to unfavourable market conditions. In this offering, existing shareholders, including Ather’s co-founders Tarun Mehta and Swapnil Jain, and other investors like the National Investment and Infrastructure Fund (NIIF) and Tiger Global Management, will sell a total of 11.1 million shares, significantly less than the 22 million shares mentioned in the previous draft. The bidding process for shares is scheduled to open for three days starting April 28, with a limited private placement for anchor investors set for April 25. Notably, Hero MotoCorp, which holds over 40% of Ather, will not be selling its shares during this IPO.
Proceeds from the IPO are earmarked for several strategic initiatives. A significant allocation of 9.27 billion Indian rupees (around $108.8 million) is set to establish an electric two-wheeler manufacturing facility in Maharashtra. Additionally, Ather plans to invest 7.5 billion rupees ($88 million) into research and development and 3 billion rupees ($35.2 million) into marketing efforts. Furthermore, 400 million Indian rupees ($4.7 million) will be dedicated to repaying existing borrowings.
In 2024, Ather reported a 21% increase in sales, reaching 126,353 units, and achieving a market share of 10.7%. The startup, established in 2013 and having launched its first electric two-wheeler in 2018, generated 15.79 billion Indian rupees ($185.4 million) in revenue during the first nine months of the fiscal year ending December, although it recorded a net loss of 5.78 billion Indian rupees ($67.8 million), an improvement from the previous year’s loss.
In comparison, Ather’s primary rival, Ola Electric, which had a substantial market share of 34.1% last year, launched its IPO in the Indian stock market with a remarkable 20% surge. However, its stock has since experienced a downturn, plummeting nearly 42%, closing at 53.02 Indian rupees recently.
Overall, Ather Energy’s recalibrated IPO reflects the shifting dynamics within the electric vehicle sector, as companies navigate market challenges while seeking to expand their presence in a growing industry.
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