Summary:
Ather Energy reduces IPO size by 18% to $308M due to market conditions.
Targeting a post-money valuation of $1.4 billion, down from $2 billion.
11.1 million shares will be sold by existing shareholders, cut from 22 million.
Plans to invest $108.8 million in a new electric two-wheeler facility in Maharashtra.
Achieved a 21% sales increase in 2024, reaching 126,353 units.
Ather Energy's IPO Update
Ather Energy, a prominent Indian startup focused on electric two-wheelers, has announced a reduction in its initial public offering (IPO) size by 18%, bringing it down to 26.26 billion Indian rupees (approximately $308.3 million). This adjustment comes as the company aims for a post-money valuation of $1.4 billion, a decrease from its previous target of up to $2 billion.
Reasons for IPO Adjustment
The decision to trim the IPO size is attributed to current market conditions. Ather's existing shareholders plan to sell 11.1 million shares, halving the original 22 million shares indicated in last year’s draft prospectus. The bidding for Ather shares is set to commence on April 28, with a private placement for anchor investors on April 25.
Stakeholders Involved
Key stakeholders, including co-founders Tarun Mehta and Swapnil Jain, along with NIIF and Tiger Global Management, will offload their stakes during the IPO. Notably, Hero MotoCorp, which owns over 40% of Ather, will retain its shares.
Planned Utilization of Funds
Ather plans to allocate 9.27 billion Indian rupees (around $108.8 million) for establishing a new electric two-wheeler facility in Maharashtra. Additional funds will be directed towards research and development (7.5 billion rupees or $88 million) and marketing initiatives (3 billion rupees or $35.2 million), with 400 million rupees (approximately $4.7 million) earmarked for repaying debts.
Performance and Market Position
In 2024, Ather recorded a 21% increase in sales, totaling 126,353 units. The startup holds a 10.7% market share according to a CRISIL Report. Since its inception in 2013, Ather launched its first electric scooter in 2018 and generated 15.79 billion Indian rupees (around $185.4 million) in revenue for the nine months ending December.
Competitive Landscape
Ather's main competitor, Ola Electric, which commanded a 34.1% market share, successfully debuted on the stock market last year, although its share price has since dropped significantly.
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