Ather Energy Plans $370 Million IPO to Expand in India’s Growing EV Market
Indian Electric Scooter Manufacturer Set for Major Public Offering
Bengaluru-based Ather Energy, a leading player in the electric scooter market, is preparing to raise approximately $370 million through its initial public offering (IPO), as outlined in its draft prospectus filed on Monday. This move marks a significant step for the startup as it aims to capitalize on the burgeoning demand for electric vehicles (EVs) in India, the world’s third-largest automotive market.
Target Valuation and Share Details
According to sources familiar with the situation, Ather Energy is aiming for a valuation between $1.5 billion and $2 billion. The IPO will include the issuance of new shares, in addition to the sale of up to 22 million shares from existing investors. However, the company has opted not to comment on the details of the IPO at this time.
Strategic Use of IPO Proceeds
Ather Energy plans to utilize the funds raised from the IPO to finance the construction of a new manufacturing plant in Maharashtra. Additionally, the company will use part of the proceeds to repay existing borrowings and to support its research and development efforts. This strategic investment is aligned with India’s growing interest in electric mobility.
India’s EV Market Dynamics
India’s electric vehicle market is experiencing rapid growth, driven by favorable government incentives and increasing fuel prices. The Indian government has set ambitious targets, aiming for 30% of private cars and 70% of commercial vehicles to be electric by 2030. This burgeoning market is attracting significant attention from both new entrants and established automakers.
Competitive Landscape
Ather Energy is entering a competitive landscape dominated by well-funded startups and traditional auto giants. Ola Electric, a direct competitor, currently leads the market with a 31% share. TVS Motor and Bajaj Auto follow with market shares of 20% and 19%, respectively, while Hero MotoCorp holds around 5%. Notably, Bajaj Auto’s market share increased to 11% by the end of June this year, reflecting the growing competitiveness in the EV sector.
Company Background and Financials
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy is renowned for its focus on in-house design, with 80% of its key components developed internally. The startup has successfully raised approximately $500 million across multiple funding rounds. For the fiscal year ending in March, Ather reported a loss of $126 million on revenues of $213 million.
IPO Management
Axis Capital, HSBC, JM Financial, and Nomura are serving as the lead book-runners for Ather Energy’s IPO. As the company prepares for this significant financial move, all eyes will be on how it leverages this capital to strengthen its position in India’s dynamic electric vehicle market.
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