Bengaluru-headquartered EV startup Ather Energy, backed by Hero Group, has now revised its plans for an initial public offering (IPO) by reducing the size of the offering by 18%. According to the new draft prospectus filed with the Securities and Exchange Board of India (SEBI), Ather Energy now intends to raise ₹2,626 crore (about $308.3 million) from the IPO. This is significantly lower than the initial target of ₹3,100 crore set when the company first announced its plans for a public listing.
The company had originally sought a post-money valuation between $1.5 billion and $2 billion. However, following the reduction in its offering, Ather is now targeting a valuation of $1.4 billion, according to media reports. The IPO will open for subscription on April 28 and will close today days later, on April 30. Prior to this, anchor investors will have the opportunity to bid in a private placement on April 25. The price band for the shares is expected to be disclosed shortly before the IPO opens for subscription.
As part of the revised offering, Ather Energy will issue new shares in the market, alongside an offer for sale (OFS) by existing shareholders. The updated prospectus shows that 11.1 million shares will be sold by these shareholders, a decrease from the previously planned 22 million shares. Ather’s co-founders, Tarun Mehta and Swapnil Jain, are some of the major stakeholders who are offloading shares in this IPO, and will be joined by investors such as Tiger Global Management and the National Investment and Infrastructure Fund (NIIF). However, Hero MotoCorp, Ather’s largest shareholder, with a stake of around 40%, will not sell any of its shares during this offering.
Ather Energy has a plan for utilizing the funds raised from the IPO. According to the red herring prospectus, a major portion of the proceeds, around ₹927.2 crore (or $108.8 million), will be deployed towards setting up a new electric two-wheeler manufacturing facility in Maharashtra, which will in turn help the firm increase production capacity and meet the growing demand for electric vehicles (EVs) in India. Additionally, Ather has allocated ₹750 crore ($88 million) for research and development (R&D) initiatives, which is intended to support the company’s efforts to work on its existing its product lineup, which currently includes the Ather 450X electric scooter. Another ₹300 crore ($35.2 million) will be directed towards marketing initiatives, aimed at increasing brand awareness and driving consumer adoption of electric vehicles. The rest of the capital will be deployed towards debt repayment, which is another key priority for the EV firm, and other purposes.
This development comes after the firm recorded a growth in its sales for the previous year, amounting to a total of 126,353 units for the period. As of 2024, Ather held a market share of approximately 10.7%, positioning it as one of the top players in the electric two-wheeler sector. Despite these positive sales figures, Ather Energy continues to operate at a loss. The company reported a revenue of ₹15.79 billion ($185.4 million) for the nine months ending December 2024. However, it also posted a net loss of ₹5.78 billion ($67.8 million), which was an improvement from the previous year’s loss of ₹7.76 billion ($91.1 million).
