BENGALURU: Ather Energy, the electric two-wheeler manufacturer, has made a significant adjustment to its initial public offering (IPO) ahead of its anticipated listing, reflecting a cautious approach to capital raising amid a challenging market landscape. The company filed its red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI) on April 22, 2025, indicating a revised primary offer size of ₹2,626 crore, a 15% reduction from the previously proposed ₹3,100 crore outlined in its draft RHP submitted in September 2024.
The IPO is set to open for subscription on April 28 and will close on April 30, with anchor bidding scheduled for April 25. Ather’s equity shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with the NSE designated as the lead exchange. This IPO marks the first major mainboard offering of the fiscal year 2025-26.
In a notable shift, the secondary sale component—known as an offer for sale (OFS)—has been halved, with Ather now planning to offer up to 1.1 crore equity shares, down from the 2.2 crore shares initially proposed. Among the investors scaling back their OFS contributions are backers such as Caladium Investment, NIIF II, and Internet Fund III, alongside IIT Madras’ incubation bodies. Founders Tarun Mehta and Swapnil Jain have also slightly reduced their respective contributions to 9.8 lakh shares each from the previously planned 10 lakh shares. Importantly, Hero MotoCorp, which holds a substantial stake in Ather, continues to retain its full holding and is not participating in the OFS.
The proceeds from the fresh issue are earmarked for several key initiatives: ₹400 crore for research and development, ₹585 crore for expanding manufacturing facilities, ₹530 crore for establishing new retail outlets and experience centers, and ₹800 crore for the repayment or prepayment of certain borrowings. Additionally, ₹228 crore has been allocated for general corporate purposes.
Ather’s decision to scale back the IPO comes amid a landscape where Indian equity markets have displayed a mixed appetite for tech-first and capital-intensive ventures. The downscaling aligns with broader trends observed among other issuers, reflecting a need to meet prevailing investor expectations regarding profitability and capital efficiency.
Founded in 2013 and incubated at IIT Madras, Ather manufactures premium electric scooters and operates its own fast-charging network, Ather Grid, across more than 140 cities in India. As of the financial year 2023-24, the company reported consolidated revenue of ₹1,806 crore but continued to operate at a loss, with net losses amounting to ₹864 crore. The IPO is seen as a strategic move to strengthen its balance sheet as Ather competes in a crowded electric mobility market, aiming to scale its manufacturing capacity to cater to both urban and tier II markets.
Amidst global market volatility, including concerns surrounding US tariffs and weak consumption trends in India, Ather's decision to reduce its IPO size may also be a response to the broader economic environment. Foreign investors have been actively offloading their holdings, with net sales of Indian equities reaching nearly $33 billion between the second half of the last fiscal year and mid-April 2025.
Despite these challenges, Ather Energy has established itself as a key player in the Indian electric mobility sector. The company was one of the first to launch e-scooters in India back in 2018, but it has faced stiff competition from larger rivals, such as Ola Electric and TVS Motor Company, which have leveraged discounts and a wider distribution network to drive sales.
In its most recent financial reporting, Ather indicated a narrowing of losses, with a reported loss of ₹578 crore in the nine months ending December 2024, compared to ₹776 crore in the same period the previous year. This improvement is attributed to increased sales of its electric family scooter, the Rizta, which was launched last year.
As Ather prepares for its IPO, it is targeting a post-money valuation of ₹12,800 crore, down from earlier expectations of ₹14,000 crore. This adjustment marks the second valuation cut ahead of the IPO, as the company had initially aimed for a valuation range of ₹17,000 crore to ₹20,000 crore. The revision reflects the cautious sentiment prevailing among investors amidst ongoing macroeconomic uncertainties.
With the anchor book opening on April 25, 2025, and the public issue running from April 28 to April 30, Ather Energy is keenly anticipated by market watchers. The company is working with Axis Capital, HSBC, JM Financial, and Nomura as Book Running Lead Managers (BRLMs) for this offering.
Ather Energy's journey from its inception to becoming the fourth-largest electric two-wheeler manufacturer in India is a testament to its innovative approach and commitment to sustainable transportation. The firm operates manufacturing facilities in Whitefield, Bengaluru, and Hosur, Tamil Nadu, with the Hosur unit capable of producing 1.1 lakh scooters and 1.2 lakh battery packs annually. Furthermore, Ather has begun expanding its international presence, launching its products in Nepal and Sri Lanka, while maintaining over 175 experience centers across India.
As the electric mobility landscape continues to evolve, Ather Energy's IPO represents a significant moment not just for the company, but for the industry as a whole, reflecting the growing importance of sustainable transportation solutions in the modern economy.
