Ather Energy IPO Size Reduced to $308M - Valuation Details

Ather Energy Adjusts IPO Plans

Ather Energy, the Indian manufacturer of electric two-wheelers, has revised the size of its proposed initial public offering (IPO). The company is now aiming to raise 26.26 billion Indian rupees, equivalent to $308.3 million, a reduction of 18% from previous estimates.

Valuation and Market Conditions

The Bengaluru-based company has confirmed its target post-money valuation stands at $1.4 billion. This is a shift from earlier aspirations last September, when a valuation between $1.5 billion and $2 billion was sought.

Ather Energy attributes the adjustments to current market conditions, influencing both the IPO size and the desired valuation.

Share Offering Details

The number of shares offered by existing shareholders has been reduced to 11.1 million, a decrease from the 22 million shares initially proposed in the previous draft prospectus.

The bidding period for Ather shares will commence on April 28th and remain open for three days. A private placement for anchor investors is scheduled for April 25th.

Shareholder Stake Sales

Ather co-founders, Tarun Mehta and Swapnil Jain, alongside National Investment and Infrastructure Fund Limited (NIIF) and Tiger Global Management’s Internet Fund III, are planning to reduce their holdings through the IPO.

Notably, Hero MotoCorp, which holds a significant stake exceeding 40% in the startup, will not be participating in the share sale during this IPO.

Use of IPO Proceeds

Ather Energy intends to allocate 9.27 billion Indian rupees ($108.8 million) towards the establishment of a new electric two-wheeler manufacturing facility in Maharashtra.

Furthermore, 7.5 billion rupees ($88 million) will be directed towards research and development initiatives, while 3 billion rupees ($35.2 million) will fund marketing efforts.

An additional 400 million Indian rupees ($4.7 million) will be used to settle existing borrowings.

Sales Performance and Market Share

Government data indicates a 21% increase in Ather’s sales in 2024, reaching a total of 126,353 units.

The company secured a 10.7% market share in the same year, as highlighted in the CRISIL Report referenced within the draft prospectus.

Company History and Financials

Founded in 2013, Ather introduced its first electric two-wheeler to the market in 2018.

During the nine-month period ending December, the company reported revenue of 15.79 billion Indian rupees ($185.4 million). However, it also experienced a net loss of 5.78 billion Indian rupees ($67.8 million), which represents an improvement from the 7.76 billion Indian rupees ($91.1 million) loss recorded in the previous year.

Comparison to Ola Electric

Ather’s competitor, Ola Electric, which currently holds a 34.1% market share, completed its listing on the Indian stock exchanges last year.

Ola Electric initially saw a substantial 20% surge in its share price upon debut, marking the largest listing for an Indian company in two years. However, its share value has since decreased by approximately 42%, closing at 53.02 Indian rupees on Tuesday.