Ather Energy, a prominent player in India’s electric two-wheeler sector, is gearing up for its much-anticipated initial public offering (IPO). The Bengaluru-based firm has recently taken a significant step by converting its compulsory convertible preference shares (CCPS) into equity, signaling an imminent stock market entry. With an expected launch date in April, Ather is poised to make waves in the EV market.

Ather Energy’s Strategic Move: CCPS Conversion

In a pivotal move, Ather Energy has transformed over 1.73 crore outstanding CCPS into 24.04 crore fully paid-up equity shares. This conversion, approved by the Board of Directors on March 8, 2025, is a crucial milestone in the company’s IPO journey. As per the Securities and Exchange Board of India (SEBI) regulations, all CCPS must be converted into equity before the submission of the Red Herring Prospectus (RHP). This transition effectively clears the path for Ather to advance with its IPO plans.

IPO Size and Structure: What to Expect

Ather Energy’s upcoming IPO is projected to comprise a fresh issue of ₹3,100 crore worth of equity shares, alongside an offer-for-sale (OFS) of 2.2 crore shares from existing investors and promoters. The funds generated from the fresh issue will primarily be allocated toward establishing a new electric two-wheeler manufacturing facility in Maharashtra and reducing existing debt. The OFS component will enable early investors to liquidate or lower their stakes, mirroring the structure of Ola Electric’s recent IPO.

Investor Sentiment: Will Ather’s IPO Succeed?

Ather Energy has successfully carved out a niche in the premium electric scooter market, competing against notable brands like Ola Electric, TVS iQube, and Bajaj Chetak. However, the market’s appetite for electric vehicle (EV) stocks has been somewhat unpredictable. While Ola Electric’s IPO initially attracted interest, it later experienced volatility due to concerns regarding profitability and cash flow. Investors will scrutinize Ather’s financial health, including revenue trends, losses, and funding strategies, before committing to the IPO.

Innovation and Growth: Ather’s R&D Expansion

Beyond its IPO aspirations, Ather Energy is also enhancing its research and development (R&D) capabilities. In February, the company announced plans to expand its testing and validation center, known as The Juggernaut, located in Bengaluru’s Begur. Focused on advancing battery technology, improving range efficiency, and enhancing vehicle software, these R&D initiatives are critical for Ather’s long-term growth and can significantly influence investor confidence.

The Bigger Picture: The EV IPO Surge in India

If Ather’s IPO unfolds as anticipated, it could herald a new era for EV stock listings in India. This upcoming IPO not only sets a precedent for future electric vehicle startups seeking public funding but also offers insights into how companies navigate the evolving regulatory landscape, especially in light of recent cuts to the FAME subsidy. Investors will be closely monitoring Ather’s strategies to adapt to these changes as it prepares for its market debut.

In conclusion, Ather Energy’s IPO represents not just a financial milestone but also a potential catalyst for the entire electric vehicle sector in India. As the company moves forward, the market will be watching closely to see how it navigates both challenges and opportunities ahead.