The Indian electric two-wheeler market is heating up, and Ather Energy is at the forefront, as the company embarks on its highly anticipated initial public offering (IPO). This move is set to raise a significant amount of capital, which will be crucial for Ather’s continued growth and expansion in the highly competitive market. Ather Energy’s IPO opened for public subscription on Monday, April 28, and the company also announced raising Rs 1,340 crore ($158 million) from anchor investors ahead of the share sale. The anchor book saw participation from global and domestic investors, including Custody Bank of Japan, Franklin Templeton, Abu Dhabi Investment Authority (ADIA), Eastspring Investments, Morgan Stanley Investment Management, and Societe Generale. Some of the prominent domestic institutions that have allocated shares in Ather Energy’s IPO include PSBI Mutual Fund, Aditya Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund, Invesco Mutual Fund, Aditya Birla Sun Life Insurance, ITI Mutual Fund, and Union Mutual Fund. The company is issuing new shares worth up to Rs 7,500 crore ($90 million) and offering 49.6 million shares for sale by existing investors including founders Tarun Mehta and Swapnil Jain, Hero MotoCorp, and Singapore’s GIC. The offer for sale (OFS) component is expected to dominate the issue size, with a number of early investors looking to partially exit. Ather Energy’s IPO comes at a time when the Indian public market is showing signs of softening, with rising global volatility and cautious investor sentiment prompting many companies to recalibrate their listing plans. India’s overall public market momentum has been slowing down, with a 23% year-on-year drop in volume and modest growth in proceeds, according to EY’s latest IPO trends report. Benchmark indices have also remained under pressure, weighed down by weak earnings, foreign capital outflows, and global uncertainty linked to tariffs and inflation. This backdrop is expected to make investors more discerning about upcoming EV listings, particularly those from Indian companies. The IPO will be closely watched, especially after the lacklustre post-listing performance of Ola Electric, one of India’s highest-profile EV IPOs earlier this year. Despite a strong debut, Ola Electric’s shares have lost significant value since, hurt by market share erosion and regulatory challenges. Analysts have warned that this could make investors more cautious about upcoming EV listings. One of the challenges Ather Energy faces is its heavy reliance on Chinese supply chains for critical battery components. This is a concern increasingly highlighted by policymakers and industry leaders. The Indian EV sector continues to grow steadily, supported by rising consumer demand, favourable regulations, and expanding charging networks. However, challenges remain, particularly the sector’s reliance on foreign supply chains for battery components. Despite the challenges, Ather Energy has made significant strides in expanding its presence in the Indian market. Founded in 2013, the company has steadily grown its market share amid growing adoption of EVs in India. Hero MotoCorp is its largest shareholder, and the company has continued to innovate, with its smart scooters like the Ather 450X being a major success. However, Ather Energy’s financial performance has been a concern. The company has reported losses for at least the second consecutive year, with its losses widening to Rs 10,600 crore in fiscal 2024. This has raised concerns about the company’s ability to sustain its growth narrative. The timing of Ather Energy’s IPO could prove challenging. Global capital markets have been shaken by tariff escalations between the US and China, while in India, IPO proceeds in the March quarter grew only 12% year-on-year, trailing behind global peers such as Japan, Hong Kong, and South Korea. India’s share of global IPO volumes also fell to 21.6% from nearly 29% a year ago, the EY report noted. Ather Energy’s filing also comes at a time when India’s EV sector is expected to continue growing steadily, supported by rising consumer demand, favourable regulations, and expanding charging networks. However, challenges remain, particularly the sector’s reliance on foreign supply chains for battery components. The company will be watching the market sentiment closely, as it seeks to win investor confidence. With its innovative products, expanding market presence, and strong leadership, Ather Energy has the potential to thrive in the competitive EV market. However, the company must address its financial performance and challenges related to foreign supply chains to win over investors.
“Ather Energy’s IPO is a significant milestone for the company, and we are excited to raise capital to continue our growth journey. We believe that our innovative products, strong leadership, and expanding market presence will help us to overcome the challenges we face and deliver sustainable growth to our stakeholders,” said Tarun Mehta, co-founder and CEO of Ather Energy.
Ather Energy’s IPO is expected to be a significant event in the Indian EV market, and the company will be watching the market closely as it seeks to win investor confidence. With its innovative products, expanding market presence, and strong leadership, Ather Energy has the potential to thrive in the competitive EV market. In the coming days and weeks, Ather Energy will need to address the challenges it faces and demonstrate its ability to sustain its growth narrative. With the right strategy and execution, Ather Energy can overcome its challenges and deliver sustainable growth to its stakeholders. Ather Energy’s IPO is a testament to the company’s commitment to the Indian EV market, and we look forward to seeing how the company will navigate the challenges ahead and deliver sustainable growth to its stakeholders.
Ather Energy’s journey is just beginning, and the company has the potential to make a significant impact in the Indian EV market. With its innovative products, expanding market presence, and strong leadership, Ather Energy is well-equipped to overcome the challenges it faces and deliver sustainable growth to its stakeholders.
