Ather Energy, a leading player in India’s electric two-wheeler market, is set to file its Draft Red Herring Prospectus (DRHP) with SEBI to raise Rs 4,500 crore from its Initial Public Offering (IPO). This comes after a series of successful funding rounds that have elevated its valuation to approximately $2.5 billion, reflecting its growth trajectory in the rapidly expanding electric vehicle (EV) sector. As Ather prepares for its market debut, it follows closely in the footsteps of its rival, Ola Electric, which recently achieved a $4.8 billion valuation through a successful IPO. Below, we break down the key elements of this anticipated offering and Ather’s growth.

Ather’s Upcoming Rs 4,500 Crore IPO

Ather Energy, according to sources, is expected to file its DRHP next week with the Securities and Exchange Board of India (SEBI). The company aims to raise Rs 4,500 crore, comprising a mix of fresh issue and offer for sale (OFS). This move positions Ather as a significant contender in the electric vehicle space, which has seen increased investor appetite.

The target valuation for Ather Energy stands at approximately $2.5 billion, nearly double its previous valuation after its recent fundraise, demonstrating strong confidence in the company's growth prospects.

Recent Funding Success Elevates Valuation

In a remarkable financial achievement, Ather Energy secured $71 million last month through a funding round led by the National Investment and Infrastructure Fund (NIIF), which boosted its valuation to $1.3 billion. This significant capital infusion propelled Ather into unicorn startup status. The company’s valuation has doubled since its last funding round, highlighting its swift ascent in the EV sector.

Hero MotoCorp, an existing shareholder, also reinforced its commitment to Ather in September last year with a substantial investment of Rs 550 crore, further solidifying its financial foundation.

Venture Debt and Equity Raise

In May 2024, Ather raised Rs 286 crore ($34 million) through a combination of debt and equity funding. This included contributions from Stride Ventures, which invested close to Rs 200 crore via debentures. Additionally, Ather’s co-founders, Tarun Mehta and Swapnil Jain, each contributed Rs 43.28 crore through Series F preference shares.

This diverse funding strategy has enabled Ather to maintain liquidity while positioning itself for future growth. As demand for electric two-wheelers surges, securing such capital is essential to scaling operations and advancing technology.

Ola Electric’s Influence and Market Comparison

Ather’s IPO announcement follows Ola Electric’s successful listing on the bourses in August 2024, where it raised Rs 6,146 crore. Ola's shares surged by 20% on their market debut, pushing the company’s valuation to $4.8 billion. This impressive market performance set a high benchmark for other EV players, including Ather.

Currently, Ather Energy holds a 12% market share in India’s electric two-wheeler segment, behind Ola Electric at 40% and TVS Motors at 30%. Despite these figures, Ather registered a 51% month-on-month growth in sales, delivering 10,829 units in August. This indicates robust demand and growing market acceptance for its products.

Financial Performance and Outlook

For the financial year 2024, Ather Energy reported consolidated revenue of Rs 1,753 crore, reflecting a minor decline of 1.7% Year-on-Year (YoY). However, the company’s aggressive expansion strategy and impressive sales growth suggest that its financial performance could see a strong rebound in the near future.

With the upcoming IPO, Ather aims to further capitalize on its market position, attract new investors, and enhance its competitiveness against its rivals, particularly in light of the rapidly growing demand for electric vehicles in India.

Ather Energy’s IPO is shaping up to be a pivotal moment in the company’s evolution, as it seeks to raise substantial capital while growing its market share in the increasingly competitive electric vehicle space. This development not only reflects the company’s confidence but also the broader investor enthusiasm for electric two-wheelers as a long-term growth industry.