India’s electric vehicle (EV) space is booming, and one of the big names, Ather Energy, is now stepping into the stock market. The company, known for its electric scooters and innovation in EV technology, has filed its Draft Red Herring Prospectus (DRHP) and is all set to launch an IPO worth ₹2,981 crore.
This move is big not just for Ather, but also for investors looking to ride the EV growth wave in India. Let’s break down the full picture of Ather’s IPO, looking closely at its funding details, shareholding, performance, and future plans.
Total Issue Size and Structure of the Ather IPO
Ather’s total issue size is ₹2,981 crore. Out of this, ₹2,626 crore will come from fresh equity shares. The remaining ₹355 crore is from an Offer for Sale (OFS) by existing investors. This OFS will allow some early investors and promoters to reduce their stake partially, while bringing in new shareholders from the market.
This combination of fresh issue and OFS helps Ather raise funds for its future expansion while giving an exit option to some investors.
Who Is Selling Their Shares in This IPO?
The Offer for Sale will see founders Tarun Mehta and Swapnil Jain, along with a few other early investors, sell a total of 19.60 lakh shares. Interestingly, both founders had acquired these shares at an average price of ₹21.09. At the upper end of the IPO price (₹321), they stand to make gains of around 1,422%.
However, Hero MotoCorp, which is Ather’s largest shareholder, is not selling any shares in this offering. Hero holds a significant 40% stake in the company and remains a long-term strategic investor.
IPO Price Band, Face Value and Lot Size Details
The IPO price band is fixed at ₹304 to ₹321 per share, and the face value is ₹1 per share. The lot size for retail investors is 46 shares, meaning the minimum investment will be ₹14,766 at the upper band.
Once the IPO closes, Ather will be listed on both NSE and BSE, giving investors access through regular stock exchanges.
Ather’s Financial Performance: Rising Losses Over the Years
While the company is making headlines with its tech and scooters, its financials tell a different story. Ather has been making consistent losses:
- FY22 Loss: ₹344.1 crore
- FY23 Loss: ₹864.5 crore
- FY24 Loss: ₹1,059.7 crore
That’s nearly a threefold increase in just three years. This growing loss trend could worry investors who are looking for quicker profitability.
Revenue Has Also Slowed Down Recently
Ather’s revenue saw a minor dip in FY24, which may signal a slowdown in sales or growth challenges:
- FY23 Revenue: ₹1,780.9 crore
- FY24 Revenue: ₹1,753.8 crore
This decline, though not huge, is important because it shows that along with rising losses, revenue is not growing at the same pace.
How Ather Operates: Complete Control on Product Development
Ather Energy’s business model is based on in-house development. They handle:
- Product design
- Research & development
- Manufacturing
- Charging infrastructure
This gives Ather complete control over the product quality and innovation, which is a strong point. Their main focus is on performance, tech features, and user experience.
Product Portfolio and Features
Ather is currently selling two main scooter lines:
- Ather 450 Series – Known for speed and advanced features
- Ather Rizta – A new family-friendly scooter with comfort-based design
These scooters come with modern features like touchscreen displays, WhatsApp alerts, traction control, and more. The aim is to give users a smart ride, not just a regular commute.
EV Market in India: A Growing Opportunity
India is the world’s largest two-wheeler market. In FY24, 18.4 million units were sold. According to Crisil, this number can touch 29–30 million units by FY31. That’s a massive growth curve, and EVs are expected to take up a bigger share in this.
Ather is betting on this growth with its smart scooters and expanding charging network. If the market moves toward electric faster, Ather stands to gain a lot.
Post-IPO Shareholding and Promoter Control
Even after the IPO, the company’s promoters and Hero MotoCorp will keep control. Hero holds around 40% stake, and the Promoter Group has a total of 51.80%.
This strong promoter backing may give confidence to new investors as it shows long-term commitment from the company’s founders and early backers.
Ather IPO Grey Market Premium (GMP): What It Says
Currently, the Grey Market Premium (GMP) for Ather is just ₹6, which suggests a possible listing price of ₹327 at the top band of ₹321.
This is a very small premium of around 1.87%, and it’s important to note that the GMP has dropped from ₹17 earlier. This signals lower excitement in the unlisted market, and potential investors should stay alert.
Risks Mentioned in Ather’s DRHP
Ather’s Red Herring Prospectus (RHP) mentions some serious business risks:
1. High Dependency on External Suppliers
Ather only makes its batteries in-house. For all other parts like motors, controllers, and plastics, it relies on third-party vendors. Any delay or supply issue could directly hit production and sales.
2. Customer Acquisition and Retention
If the company is unable to attract or keep its target customers, it could affect its entire business model. This includes impact on revenue, operations, and future plans.
3. Government Subsidy Uncertainty
EV makers in India depend on FAME subsidies from the government. If these are cut, withdrawn, or if Ather’s products don’t qualify, prices may rise and demand may fall. This could be a major threat to the business.
