Bengaluru’s vibrant electric two-wheeler market is abuzz with excitement as Ather Energy Ltd. gears up for its highly anticipated initial public offering (IPO), set to commence on April 28, 2025. This marks a significant milestone as it represents the first major IPO on India’s mainboard market for the current fiscal year. The Ather Energy IPO will feature a unique combination of fresh share issuance worth ₹2,626 crore alongside an offer for sale totaling ₹354.8 crore.
Ather Energy IPO Overview
The upcoming IPO includes a fresh issue of equity shares and an offer for sale, which will see the company’s founders and promoters, including Tarun Mehta and Swapnil Jain, divesting part of their holdings. The entire offering is managed by prominent financial institutions, including Axis Capital Ltd., HSBC Securities, JM Financial, and Nomura Financial Advisory.
- IPO Opening Date: April 28, 2025
- IPO Closing Date: April 30, 2025
- Price Range: ₹304 – ₹321
- Total Offer Size: ₹2,980.7 crore
- Minimum Lot Size: 46 shares, with multiples thereon
Ather Energy’s Business Model
Ather Energy is not just an electric two-wheeler manufacturer; it offers an entire ecosystem that includes software solutions, charging infrastructure, and smart accessories, all meticulously designed in-house. Their innovative approach involves:
- Developing in-house battery packs, portable chargers, and electric motors.
- Designing critical components like motor controllers, control units, and chassis.
- Outsourcing manufacturing to specialized suppliers.
In the nine months leading to December 31, 2024, Ather Energy reported sales of 107,000 and 109,000 electric two-wheelers, showcasing its growing market presence.
Use of IPO Proceeds
Ather Energy plans to strategically allocate the funds raised from its IPO as follows:
- ₹927.22 crore for the establishment of a new electric two-wheeler factory in Maharashtra.
- ₹40.03 crore aimed at repaying existing borrowings.
- ₹750 crore dedicated to research and development initiatives.
- ₹300 crore earmarked for marketing efforts.
Financial Performance Insights
The company has shown impressive revenue growth, reporting a 28.3% increase to ₹1,578.9 crore in the first nine months of FY 2025, up from ₹1,230.4 crore in the same timeframe the previous year. However, net profits have faced challenges, dipping by 25.6% to ₹577.9 crore.
As of February 28, 2025, Ather’s total debt was reported at ₹533.6 crore. The electric vehicle sector is competitive, with peers like Hero MotoCorp, Bajaj Auto, Ola Electric, TVS Motors, and Eicher Motors posing significant competition.
Key Risks for Ather Energy
Despite promising growth, Ather Energy faces several risks that could impact its operations:
- Supply Chain Dependence: While the company manufactures its own batteries, it relies heavily on third-party suppliers for other critical components.
- Financial Stability: Ather has recorded losses since its inception, including a ₹1,059.7 crore pre-tax loss in FY 2024.
- Market Demand: The company’s success hinges on the demand for electric two-wheelers, which may fluctuate based on market conditions.
- Geographic Concentration: With significant sales concentrated in South India, Ather is vulnerable to regional challenges, including natural disasters and regulatory changes.
Grey Market Insights
As of April 25, 2025, the grey market premium (GMP) for Ather Energy’s IPO is pegged at ₹5, suggesting a potential listing price of ₹326 per share, which is approximately a 1.56% premium over the upper price range. Please note that GMP is speculative and not an official valuation.
Conclusion
As Ather Energy approaches its IPO, market participants are keenly watching how this venture will unfold. The company’s innovative approach to electric two-wheelers and the strategic use of IPO proceeds could position it favorably in the fast-evolving EV landscape. Investors and stakeholders alike are eager to see how Ather Energy will navigate the challenges and opportunities ahead.
