Ather Energy Adjusts IPO Plans Amid Market Conditions

In a strategic move reflecting current market dynamics, Ather Energy, a leading electric two-wheeler manufacturer, has submitted its red herring prospectus to the Securities and Exchange Board of India (Sebi). This comes as the company narrows the scope of its initial public offering (IPO) in response to ongoing volatility and tepid interest from investors.

Details of the Revised IPO

According to the latest filing, Ather has decreased the fresh issue size to ₹2,626 crore, a significant reduction from the ₹3,100 crore initially outlined in its draft prospectus submitted in September 2024. The offer for sale (OFS), through which existing investors and promoters will sell shares, has also been diminished to 11 million equity shares, half of the previously planned 22 million.

• Key Dates:
  • Subscription opens: April 28
  • Subscription closes: April 30
  • Anchor book opens: April 25

Founders Tarun Sanjay Mehta and Swapnil Babanlal Jain will each sell 0.9 million equity shares, down from the earlier proposal of 1 million shares.

Investor Participation

Prominent institutional investors, including Caladium Investment, National Investment and Infrastructure Fund II, Internet Fund III Pte Ltd, and IITM Incubation Cell, will now collectively offload 9 million shares, reducing their contribution from 20 million shares as stated in the original plan.

As it stands, the company’s promoters—Mehta, Jain, and Hero MotoCorp—hold a combined stake of 51.8% in Ather, with an additional 0.87% owned by the promoter group. The selling shareholders make up 29.29% of the total ownership.

Strategic Use of Funds

Ather Energy intends to allocate ₹927 crore from the IPO proceeds for capital expenditures related to a new manufacturing facility in Maharashtra. This ambitious ₹2,000-crore plant aims to produce over one million electric two-wheelers and battery packs annually. Furthermore, the company will direct ₹750 crore towards research and development, ₹400 crore for the repayment of loans, and the remainder for marketing efforts.

Market Sentiment and Competitor Performance

Ather’s IPO comes at a time when investor sentiment toward technology firms, particularly those not yet profitable, is waning. Ola Electric, a competitor that went public in August 2024, has seen its shares plummet, currently trading at ₹53.02 on the NSE, significantly lower than its initial listing price of ₹76.

Ather Energy’s Financial Performance

In the nine months leading to December 2024, Ather reported a 28% year-on-year increase in operational revenue, totaling ₹1,579 crore. The company’s restated loss for this period was ₹58 crore, an improvement from ₹78 crore reported the previous year.

For the fiscal year 2025, Ather’s sales rose by 20% year-on-year, reaching 130,945 units, and achieving a market share of 11.39%. Notably, in the first two weeks of April, this share surged to 16%, with 7,765 units sold, including the flagship Ather 450 and the newly launched Rizta model.

Ather Energy’s strategic adjustments indicate a keen awareness of market conditions and an effort to navigate the complexities of a fluctuating investment landscape. As the company prepares for its upcoming IPO, stakeholders will be watching closely to see how Ather adapts and thrives in this evolving environment.