Ather Energy, a leading electric two-wheeler manufacturer, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹3,100 crore through an initial public offering (IPO). The IPO will include a fresh issue of equity shares and an offer for sale (OFS) by existing shareholders. Notably, Hero MotoCorp, which holds a significant stake in Ather, has decided not to sell its shares in this offering. This move underscores Hero MotoCorp’s confidence in Ather’s growth potential and market position.
Strategic Financial Planning
Ather Energy’s decision to raise ₹3,100 crore through its IPO is a strategic move aimed at bolstering its financial resources. The fresh issue of equity shares will provide the company with the necessary capital to expand its manufacturing capabilities, invest in research and development, and enhance its marketing efforts. The funds will also be used to repay existing debts, thereby strengthening Ather’s financial position.
The offer for sale (OFS) component of the IPO will see several existing investors, including GIC Ventures and Tiger Global, divesting a portion of their holdings. However, Hero MotoCorp, which holds a 37.2% stake in Ather, has opted not to participate in the OFS. This decision highlights Hero MotoCorp’s long-term commitment to Ather and its belief in the company’s future prospects.
Market Position and Growth Potential
Ather Energy has established itself as a key player in the electric two-wheeler market in India. The company has seen significant growth in its customer base, with a 34% increase in FY24, bringing the total number of customers to 1,14,000. This growth is a testament to Ather’s innovative products and strong market presence.
The company’s revenue for the first quarter of FY25 stood at ₹339 crore, with a net loss of ₹183 crore. Despite the losses, Ather’s revenue growth and expanding customer base indicate a positive trajectory. The funds raised through the IPO will enable Ather to further solidify its market position and continue its growth momentum.
Ather’s competitors, such as Ola Electric, have also made significant strides in the market. Ola Electric recently went public, raising ₹6,145 crore through its IPO. Ather’s entry into the public market is expected to further intensify competition in the electric two-wheeler segment, driving innovation and growth in the industry.
Future Prospects and Industry Impact
Looking ahead, Ather Energy plans to utilize the proceeds from the IPO to establish a new electric two-wheeler factory in Maharashtra. This expansion will significantly increase the company’s production capacity, enabling it to meet the growing demand for electric vehicles in India. Additionally, Ather will invest in research and development to enhance its product offerings and maintain its competitive edge.
The electric vehicle (EV) market in India is poised for substantial growth, driven by increasing consumer awareness and government initiatives promoting clean energy. Ather’s IPO is expected to attract significant investor interest, given the company’s strong market position and growth potential. The successful completion of the IPO will mark a significant milestone for Ather and set the stage for its future growth and expansion.
Ather’s journey from a startup to a leading player in the EV market is a testament to its innovative approach and commitment to sustainability. As the company continues to grow and evolve, it is well-positioned to make a lasting impact on the electric vehicle industry in India and beyond.
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