Hero MotoCorp-backed Ather Energy is setting its sights on a substantial valuation of between $2 billion and $2.25 billion (approximately ₹16,800 crore to ₹19,000 crore) as it prepares to file its draft prospectus for an initial public offering (IPO) next week. This Bengaluru-based electric scooter manufacturer plans to raise between ₹3,500 crore and ₹4,000 crore through the IPO, which will feature a mix of a fresh issue of shares and an offer for sale by existing shareholders. The funds raised from the IPO are expected to be partially used for expanding production capacity.
Ather Energy is positioning itself as a major player in the Indian electric two-wheeler market, being the fourth-largest manufacturer by volume. This comes on the heels of the successful IPO of Ola Electric, further emphasizing the growing interest and investment in electric vehicle (EV) companies in India.
Recent Financial Moves and Future Plans for Ather Energy
In a recent move, Ather Energy has significantly increased its share capital to ₹50 crore from ₹93.6 lakh, as reflected in a recent filing with the Registrar of Companies (RoC). This increase in share capital aligns with the company’s recent fundraising efforts, where it secured ₹286 crore through a combination of debt and equity. Stride Ventures played a major role in this round, contributing nearly ₹200 crore via debentures. Co-founders Tarun Mehta and Swapnil Jain also invested ₹43.28 crore.
Looking ahead, Ather Energy is targeting a listing in the second half of 2024. The company has enlisted HSBC Holdings Plc, Nomura Holdings Inc., and JPMorgan Chase & Co. to assist in managing the IPO. This strategic move is intended to bolster the company’s financial standing and facilitate its expansion plans.
Hero MotoCorp recently acquired an additional 2.2% stake in Ather Energy for ₹124 crore. This acquisition raises Hero MotoCorp’s total stake in the company to nearly 39%. The latest funding round has valued Ather Energy at ₹5,636 crore, marking a premium compared to the ₹4,666 crore valuation at which Hero MotoCorp previously invested ₹140 crore in December last year.
Ather Energy has also unveiled its new family scooter range, ‘Rizta’. The company, which currently has an annual production capacity of 450,000 scooters, plans to expand its production from the current 150,000 units per year once the Rizta model hits the market. This expansion is aimed at meeting the growing demand for electric scooters and reinforcing the company’s position in the EV market.
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy has seen significant growth, raising approximately $128 million in a Series E funding round in 2022. This funding round included contributions from the National Investment and Infrastructure Fund Ltd. and existing shareholders such as Hero MotoCorp.
Currently, Ather Energy operates in over 215 cities, including major urban centers like Bengaluru, Delhi, Chennai, Hyderabad, Pune, Jaipur, Kochi, Ahmedabad, Mumbai, and Kolkata. The company supports its operations with a robust network of over 2,000 charging points across more than 200 cities, facilitating the widespread adoption of its electric scooters.
As Ather Energy moves closer to its IPO, it remains a key player in the rapidly expanding electric vehicle sector in India. With substantial backing from Hero MotoCorp and a clear strategy for growth and expansion, Ather Energy is poised to make a significant impact in the EV market and attract considerable investor interest in its upcoming public offering.
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