Ather Energy, one of India’s most innovative electric vehicle (EV) manufacturers, is gearing up for its Initial Public Offering (IPO). Established in 2013 by IIT Madras graduates Tarun Mehta and Swapnil Jain, Ather Energy has rapidly positioned itself as a leader in India’s electric two-wheeler (E2W) market. Known for its high-performance electric scooters, Ather is now preparing to go public and offer investors a chance to participate in the growing EV revolution in India.
Company Overview: Pioneering the EV Market
Ather Energy is a vertically integrated company involved in the design, development, and manufacture of electric two-wheelers, batteries, and charging infrastructure. Its flagship products, the Ather 450 and Ather Rizta, have set benchmarks in the EV sector due to their performance, smart features, and innovative design. The company has also pioneered the creation of a fast-charging network, Ather Grid, which provides convenient charging options across major cities.
In FY 2024, Ather Energy captured around 11.5% of the Indian E2W market, positioning itself as the third-largest player behind Ola Electric and TVS Motor Company, with sales of 1,09,577 electric scooters. The company operates 208 experience centers and 191 service centers across India, with a few centers in Nepal as well.
Ather Energy IPO: Key Details
Ather Energy’s IPO will consist of a fresh issue of shares worth INR 3,100 crores and an offer for the sale of 2.20 crore existing shares. The company intends to use the proceeds for expanding manufacturing capacity, investing in R&D, marketing initiatives, and repaying debt.
| Details | Information |
| Total Issue Size | ₹3,100 crore (Fresh Issue) |
| Offer for Sale | 2.20 crore shares |
| IPO Type | Book Built |
| Stock Exchange | NSE, BSE |
| Fresh Issue Allocation | Expansion, R&D, Marketing |
| Offer for Sale Allocation | Existing Shareholders |
| QIB Portion | 75% |
| NII Portion | 15% |
| Retail Portion | 10% |
Ather Energy IPO Objectives
The funds raised through the IPO will primarily be used for:
- Expansion of Manufacturing: Ather plans to scale up its manufacturing facility in Maharashtra with a target production capacity of 5 lakh E2Ws per year by 2027.
- Debt Repayment: A portion of the funds will be used to repay borrowings and improve the company’s financial health.
- Investment in R&D: Ather will continue to invest in research and development, particularly in vehicle platforms, powertrains, batteries, software, and charging infrastructure.
- Marketing and Brand Building: Ather aims to strengthen its brand and market position through targeted marketing campaigns and promotions.
Financial Performance: A Growing Yet Challenging Journey
Ather Energy’s financial performance reflects its rapid growth, though the company still faces challenges in achieving profitability. While its revenue has surged in recent years, high operational costs and capital expenditures have resulted in continued losses. Here’s a summary of the company’s latest financial performance:
| Particulars (₹ Crores) | FY2023 | FY2022 | FY2021 |
| Revenue | 1,806.1 | 413.8 | 86.3 |
| Total Expenses | 2,611 | 717.9 | 291.5 |
| Profit Before Tax | -864.5 | -344.1 | -233.2 |
| Profit After Tax | -864.5 | -344.1 | -233.2 |
| EPS (₹) | (48) | (27) | (47) |
| Total Assets | 19,768 | 7,513.35 | 6,923.15 |
| Total Liabilities | 13,631 | 6,804.15 | 6,162.42 |
| Debt-Equity Ratio | 1.62 | 0.88 | 1.09 |
Ather Energy’s revenue has experienced a significant uptick, growing from ₹86.3 crores in FY 2021 to ₹1,806.1 crores in FY 2023. However, the company’s high operating costs have led to mounting losses, with a loss before tax of ₹864.5 crores in FY 2023. The company’s debt-equity ratio has also increased, indicating higher reliance on debt financing as it scales operations.
Strengths of Ather Energy
- Innovative Product Line: Ather Energy is known for its high-performance electric scooters, particularly the Ather 450X, which has a strong battery performance and smart connectivity features.
- Robust Charging Infrastructure: The Ather Grid network of over 1,000 fast-charging stations across India makes it easier for users to charge their scooters, addressing one of the key concerns in the EV market—charging infrastructure.
- Strong R&D Capabilities: Ather’s in-house R&D capabilities allow the company to develop cutting-edge features such as a touchscreen dashboard, over-the-air updates, and internet connectivity.
- Manufacturing Capacity: Ather has rapidly scaled its manufacturing capabilities, increasing production from 21,300 E2Ws in 2021 to 2,66,850 in 2024.
Risks Associated with Ather Energy
- Negative Cash Flow: Ather Energy has faced negative cash flows from operations since its inception, and achieving profitability in the near term may remain a challenge.
- Dependence on Ather 450X: The company heavily depends on the sale of the Ather 450X model. A decrease in sales could significantly impact overall revenue.
- Regulatory and Policy Risks: The company’s pricing strategy has been influenced by the FAME subsidy. The new EMPS subsidy may not be extended or replaced, potentially affecting prices and demand.
- Competition: Ather faces intense competition from both new entrants and established players in the EV market, including Ola Electric and TVS Motor Company.
The Road Ahead for Ather Energy
Ather Energy is well-positioned in the rapidly growing Indian electric vehicle market. The company’s strong brand, innovative products, and focus on expanding its manufacturing capacity and charging infrastructure put it in a favorable position to capture a significant share of the E2W market in the coming years. However, its financial performance still shows challenges in terms of profitability and cash flows.
Should You Invest in Ather Energy’s IPO?
Ather Energy’s IPO presents an exciting opportunity for investors interested in the growing EV sector. The company’s impressive growth trajectory, innovative products, and strong market presence make it an appealing long-term investment. However, the risks associated with its current profitability challenges, heavy reliance on the Ather 450X model, and intense competition should be carefully considered.
If you are bullish on the future of electric mobility in India and are willing to take on some short-term risks, Ather Energy’s IPO could be a rewarding investment. However, it’s essential to conduct thorough research and consult with financial advisors before making any decisions.
Conclusion
Ather Energy’s IPO is a significant milestone in the company’s journey to becoming a key player in India’s electric vehicle revolution. With its innovative products, strong growth potential, and expanding infrastructure, Ather Energy presents an exciting investment opportunity for those looking to invest in the future of sustainable transportation in India.
Source:
https://groww.in/blog/ather-energy-receives-sebi-approval-to-launch-ipo
https://aliceblueonline.com/ipo/ather-energy-ipo/
https://www.icicidirect.com/ipo/ather-energy-ipo
https://zerodha.com/ipo/390401/ather-energy/
