Ather Energy, a prominent electric two-wheeler manufacturer based in Bengaluru, has received long-awaited approval from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). This approval marks a significant milestone for the company as it prepares to become India’s second electric vehicle (EV) maker to go public, following Ola Electric’s debut earlier this year.
The Ather Energy IPO will consist of a fresh issue of ₹3,100 crore in equity shares and an offer-for-sale (OFS) of 2.2 crore shares by existing investors. This move is expected to boost the company’s growth and expand its presence in India’s rapidly growing electric vehicle market.
Let’s explore what this approval means for Ather Energy, its IPO plans, and how it fits into India’s electric two-wheeler revolution.
Table of Contents
Ather Energy IPO Overview
Ather Energy’s IPO will combine a fresh issue of equity shares and an offer-for-sale (OFS) by existing shareholders. Here’s a quick breakdown of the IPO details:
Key IPO Details:
- Fresh Issue of Shares: ₹3,100 crore
- Offer-for-Sale (OFS): 2.2 crore equity shares
- Pre-IPO Placement: ₹620 crore (subject to change)
- Promoters and Investors Selling Shares: Caladium Investments, Tiger Global, National Investment and Infrastructure Fund (NIIF), 3 State Ventures, and Ather’s co-founders, Tarun Mehta and Swapnil Jain.
- Hero MotoCorp’s Stake: Hero MotoCorp, Ather’s largest stakeholder with a 37.2% share, will not participate in the OFS.
Ather Energy plans to use the proceeds from the IPO for various purposes, including expanding its manufacturing capacity, strengthening research and development (R&D), and reducing existing debt.
What Will the IPO Funds Be Used For?
The fresh issue of ₹3,100 crore will be allocated across several key areas:
Capital Expenditure
Ather Energy intends to set up a new electric two-wheeler manufacturing unit in Maharashtra. This facility will increase Ather’s production capacity to meet the growing demand for electric scooters in India. The new unit is expected to have an annual capacity of 5 lakh units, complementing the current facility in Hosur, Tamil Nadu, which has a production capacity of 4.2 lakh units annually.
Research and Development (R&D)
A portion of the funds will be allocated to R&D initiatives aimed at developing new electric vehicle platforms. Ather is working on two new platforms: a motorcycle platform named “Zenith” and a scooter platform called “EL”. These new models will further expand the company’s market reach.
Debt Repayment
The IPO funds will also be utilized for reducing Ather’s existing borrowings, improving its financial position as it grows its market presence.
Marketing and Expansion
To strengthen its brand presence, Ather Energy will use a part of the funds for marketing and sales initiatives. The company aims to expand its footprint and capture a larger market share in India’s rapidly growing EV sector.
Ather Energy IPO Details: Key Players and Investors
The Ather Energy IPO will include participation from various stakeholders:
- Tiger Global
- Caladium Investments
- National Investment and Infrastructure Fund (NIIF)
- Binny Bansal’s 3 State Ventures
- Co-founders Tarun Mehta and Swapnil Jain
Ather Energy IPO Key Information
| Aspect | Details |
|---|---|
| IPO Approval Date | December 23, 2024 |
| Fresh Issue Amount | ₹3,100 crore |
| OFS (Offer for Sale) | 2.2 crore equity shares |
| Primary Use of Funds | Expansion, R&D, debt repayment, marketing |
| Target Manufacturing Capacity | 5 lakh units annually by 2026 |
| Valuation Target | ₹2-2.25 billion |
| Competitors | Ola Electric, Bajaj Auto, TVS Motor |
Hero MotoCorp, however, will not participate in the IPO, maintaining its 37.2% stake in the company.
Ather Energy’s Market Position and Future Growth
Ather Energy’s IPO is seen as a major step forward for the company and India’s EV industry as a whole. With the increasing adoption of electric vehicles, the Indian market is booming, and Ather is well-positioned to leverage this trend. The company has already made a significant impact with its innovative scooters like the Ather 450X and Ather 450 Plus.
Manufacturing Expansion
Ather Energy currently manufactures its electric scooters at its plant in Hosur, Tamil Nadu, with an annual capacity of 4.2 lakh units. However, with the increasing demand for electric vehicles, the company plans to set up a new manufacturing unit in Maharashtra with an annual capacity of 5 lakh units by May 2026. This will help the company scale its production capabilities to meet growing consumer demand.
R&D and New Products
Ather’s focus on R&D remains one of its key strengths. The company is working on two new platforms—one for electric motorcycles and the other for a new scooter model. This diversification will help Ather cater to different segments of the market and strengthen its position in the EV industry.
“This IPO marks an important milestone in Ather’s journey. We are committed to building sustainable mobility solutions and will use the funds to accelerate our growth and innovation in the electric vehicle space.”
– Tarun Mehta, CEO & Co-Founder, Ather Energy
Why Is the Ather Energy IPO Significant?
The Ather Energy IPO is a key event for both investors and the EV industry in India. Ather is only the second electric vehicle company after Ola Electric Mobility to go public. Here’s why this IPO matters:
Key Highlights:
- India’s Growing EV Market: India’s electric vehicle market is growing rapidly, driven by government initiatives, rising fuel prices, and increasing environmental awareness.
- Investor Confidence: Following Ola Electric’s success, Ather Energy’s IPO is likely to generate significant interest from investors looking to tap into the burgeoning EV sector.
- Attractive Valuation: Ather is targeting a valuation of ₹2-2.25 billion through this IPO, positioning itself as a serious contender in the Indian EV market.
Future Plans and Expansion
With the approval of its IPO, Ather Energy has laid out an ambitious expansion plan. The company aims to significantly enhance its manufacturing and R&D capabilities and introduce new electric vehicles to cater to a broader market.
Ather’s plans also include the launch of new models and expansion of its charging infrastructure, which will further boost customer convenience and promote EV adoption across India.
Conclusion
Ather Energy’s IPO is set to be a game-changer in the Indian EV market. As one of the leading electric two-wheeler manufacturers in the country, the IPO approval marks a key milestone in Ather’s growth. The funds raised through this public offering will empower the company to expand its manufacturing capabilities, improve product development, and further strengthen its position in the growing EV market.
The Ather Energy IPO is certainly one to watch as it unfolds, offering significant potential for both investors and consumers alike.
Read more: GST On Used EVs: Everything You Need to Know About the 18% Tax Hike
FAQs
What is Ather Energy IPO?
Ather Energy IPO is the company’s move to raise funds from the stock market, with a fresh issue of ₹3,100 crore and an offer-for-sale of 2.2 crore equity shares by existing investors.
What will Ather Energy do with the IPO funds?
The funds will be used for setting up a new manufacturing facility in Maharashtra, R&D for new models, debt repayment, and expanding its market presence.
Who is selling shares in the Ather Energy IPO?
The offer-for-sale includes shares from investors like Tiger Global, Caladium Investments, and the company’s co-founders, Tarun Mehta and Swapnil Jain. Hero MotoCorp, a major shareholder, will not sell its stake.
When will the Ather Energy IPO be launched?
The IPO is expected to hit the markets in the first quarter of 2025, after completing the final steps post-SEBI approval.
Why is Ather Energy going public?
Ather Energy aims to raise funds to expand its manufacturing capacity, invest in R&D, repay debt, and increase its market presence across India.
