Electric scooter manufacturer Ather Energy Pvt., which has the backing of Hero MotoCorp Ltd., is gearing up for its initial public offering (IPO) in Mumbai. This ambitious move could potentially raise around $400 million. According to insiders familiar with the situation, the company is targeting a share sale by the end of March or early April, although specific details regarding valuation and size are still being finalized.

A Potential Valuation Boost

The electric scooter maker is eyeing a pre-money valuation of approximately $1.2 billion, which could rise to about $1.6 billion once IPO proceeds are factored in. However, as discussions are ongoing, adjustments to the valuation and timeline may occur. Ather Energy has chosen not to comment on these developments at this stage.

Share Structure and Stakeholders

The upcoming IPO will include both primary and secondary shares. Founders Tarun Mehta and Swapnil Jain, along with existing investors such as the National Investment and Infrastructure Fund Ltd. and Tiger Global Management’s Internet Fund III, are expected to sell portions of their stakes. Notably, Hero MotoCorp, which holds just over 37% of Ather, will not be participating in the share sale.

A Brief History of Ather Energy

Founded in 2013, Ather Energy was among the pioneers of electric two-wheelers in India. Initially positioned as a premium brand, the company is now working to capture a larger market share amid increasing competition from established players like Bajaj Auto Ltd. and TVS Motor Co., as well as newer entrants like Ola Electric Mobility Ltd..

Current Market Trends

As Ather prepares for its IPO, it does so against a backdrop of declining demand for electric scooters in India. Recent data from the Federation of Automobile Dealers’ Associations reveals that two-wheeler sales fell by 8% in February compared to the previous year, totaling 76,086 units. In contrast, Ather’s sales surged by 20% last year, while Ola Electric saw a remarkable 52% increase.

Industry Comparisons

This upcoming IPO represents the second for an Indian electric vehicle manufacturer, following Ola, which made its debut last year with backing from Japan’s SoftBank Group Corp. However, Ola’s stock has faced significant setbacks, plummeting by as much as 65% since its peak in August, when it boasted a market valuation of $7.7 billion. As of Tuesday, Ola’s market value stands at around $2.6 billion, reflecting the volatility in the electric vehicle sector.

In conclusion, Ather Energy’s IPO could be a significant milestone for the Indian electric vehicle market, particularly as it navigates challenges and seeks to expand its footprint in an increasingly competitive landscape.