Ather Energy Limited is preparing to launch its Initial Public Offering (IPO), comprising a fresh issue worth Rs.2,626 crores and an offer for sale of 1.11 crore equity shares worth Rs.354.76 crore by existing shareholders. The IPO is scheduled to open for bidding on April 28, 2025, and will close on April 30, 2025. Following the allotment process, the shares will be listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Business Overview
Founded in 2013, Ather Energy is a pioneer in India’s electric mobility space, focusing on the design, manufacturing, and sale of smart electric two-wheelers. The company’s flagship scooters, the Ather 450 series, feature advanced technology integrations including IoT and OTA (over-the-air) updates. Ather also operates a growing EV charging network under the brand ‘Ather Grid’ in multiple Indian cities. With a commitment to innovation, the company aims to revolutionize urban transportation and strengthen its presence across India’s electric vehicle ecosystem.
GMP of Ather Energy Limited
As of now, the grey market premium (GMP) for the upcoming Ather Energy IPO is reported at Rs.3. This indicates a slight premium over the issue price, reflecting cautious investor sentiment. GMP trends often offer an early indication of the stock’s potential listing performance, and market observers are closely tracking any changes as the listing date approaches.
Promoters
The company’s promoters include Tarun Sanjay Mehta and Swapnil Babanlal Jain, the original co-founders, along with Hero MotoCorp Limited. This promoter trio brings a blend of engineering expertise, entrepreneurial vision, and industry backing that has driven Ather’s strategic evolution in the competitive EV landscape.
Selling Shareholders
The offer for sale features contributions from both promoter and non-promoter entities. Promoters Tarun Mehta and Swapnil Jain are each offering up to 9.80 lakh equity shares. Other major selling shareholders include Caladium Investment Pte Ltd (60.03 lakh shares), National Investment and Infrastructure Fund II (26.34 lakh shares), Internet Fund III (4 lakh shares), IITM Incubation Cell, IITMS Rural Technology and Business Incubator, and individual shareholder Amit Bhatia. The diversified group of sellers highlights early stakeholders monetizing part of their investment.
Lead Managers of the IPO
The IPO is being managed by a group of prominent investment banks. Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, JM Financial Limited, and Nomura Financial Advisory and Securities (India) Private Limited are acting as the Book Running Lead Managers (BRLMs). MUFG Intime India Private Limited (formerly Link Intime India Private Limited) will serve as the registrar to the offer.
Objectives of the IPO
The primary objective of the IPO is to fund the company’s expansion initiatives and strategic projects. Ather plans to utilize the proceeds to establish new manufacturing facilities, strengthen its research and development capabilities, and invest in innovative product development. Additionally, a portion of the funds will be used to repay borrowings and support day-to-day working capital requirements. The remaining funds will be allocated toward general corporate purposes, ensuring operational flexibility and future readiness.
Financial Analysis
Ather Energy’s revenue stood at Rs.1,753.8 crores in FY24, showing a marginal fall from Rs.1,780.9 crores in FY23. Despite significant investments, the company’s net losses expanded to Rs.1,059.7 crores in FY24 from Rs.865 crores in FY23. The negative EBITDA margin reflects ongoing operational investments and a growth-focused cost structure. Ather’s asset base rose to Rs.2,172 crores, driven by expansion in infrastructure and technology. The company’s financials underscore its aggressive investment-led growth approach in a highly competitive market.
Ather Energy vs. Peers
Ather competes with established and emerging electric two-wheeler players such as Ola Electric, TVS, Bajaj Auto, and Hero Electric. Unlike traditional manufacturers, Ather emphasizes a premium product experience and end-to-end technology integration. It stands out with its direct-to-consumer model and proprietary charging network. However, competitors benefit from extensive distribution networks and cost advantages. Ather’s differentiation lies in its focus on connectivity, innovation, and customer engagement, which are critical in the evolving EV landscape.
Strengths and Weaknesses of Ather Energy Limited
Strengths:
- Strong brand presence in India’s premium electric two-wheeler market.
- Proprietary EV platform with full-stack product integration.
- Ather Grid offers a nationwide charging infrastructure advantage.
- Committed to innovation through in-house R&D.
- Strategic support from Hero MotoCorp ensures financial and operational stability.
Weaknesses:
- Persistent financial losses raise concerns on profitability.
- Faces stiff competition from mass-market and low-cost EV brands.
- High marketing and customer acquisition costs impact margins.
- Limited international footprint reduces global growth leverage.
- Vulnerable to supply chain disruptions and input price volatility.
Conclusion
Ather Energy’s IPO presents a significant opportunity for investors seeking exposure to India’s electric mobility revolution. The company’s focus on technology, infrastructure, and brand-led growth positions it as a long-term contender in the EV sector. While its financials reflect ongoing investments and losses, Ather’s strategic direction and innovation-centric approach offer promising prospects. Potential investors should evaluate both the company’s strengths and the inherent risks of a rapidly evolving industry before making an investment decision.
Written by – Siddesh S Raskar
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