Ather Energy, a prominent player in the Indian electric two-wheeler market, has revised its initial public offering (IPO) plans, reducing the offering size by 18% to approximately 26.26 billion Indian rupees, equivalent to $308.3 million. This adjustment was revealed in a recent draft prospectus submitted on Tuesday.
Based in Bengaluru, Ather Energy has confirmed its goal of achieving a post-money valuation of $1.4 billion. This marks a shift from its previous valuation target of between $1.5 billion and $2 billion, which was reported last September.
The decision to scale back the IPO size and valuation is attributed to current market conditions, reflecting the challenges faced by startups in the evolving economic landscape.
In this revised offering, existing shareholders of Ather will sell 11.1 million shares, a significant decrease from the 22 million shares initially proposed in last year’s draft. The bidding process for Ather shares is set to commence for three days starting April 28, with anchor investors participating in a private placement on April 25.
Co-founders Tarun Mehta and Swapnil Jain, along with major investors such as the National Investment and Infrastructure Fund Limited (NIIF) and Tiger Global Management’s Internet Fund III, are expected to divest their stakes during the IPO. Notably, Hero MotoCorp, which holds over 40% of Ather, has opted not to sell its shares in this round.
Ather plans to allocate 9.27 billion Indian rupees (approximately $108.8 million) from the IPO proceeds to establish a new electric two-wheeler manufacturing facility in Maharashtra. Additionally, 7.5 billion rupees ($88 million) will be directed towards research and development, while 3 billion rupees ($35.2 million) will support marketing efforts. The startup also intends to use 400 million Indian rupees ($4.7 million) to settle existing debts.
In terms of performance, Ather reported a 21% increase in sales for 2024, achieving a total of 126,353 units sold, according to government statistics. The company captured a 10.7% market share during this period, as highlighted in the CRISIL Report referenced in the draft prospectus.
Founded in 2013, Ather Energy launched its inaugural electric two-wheeler in 2018. The startup reported revenues of 15.79 billion Indian rupees ($185.4 million) for the nine months ending in December, with a net loss of 5.78 billion Indian rupees ($67.8 million), a decrease from the previous year’s loss of 7.76 billion Indian rupees ($91.1 million).
In the competitive landscape, Ather faces rivalry from Ola Electric, which held a 34.1% market share last year and successfully listed on Indian stock exchanges. Ola’s IPO was marked by a remarkable 20% surge, making it the largest listing by an Indian company in two years, although its share price has since dropped by nearly 42%, closing at 53.02 Indian rupees on Tuesday.