Ather Energy's IPO Countdown: What April Could Bring for Investors

Ather Energy, a Bengaluru-based electric two-wheeler manufacturer plans its first Initial Public Offering, which will launch in April 2025. After completing its equity conversion, Ather Energy moves forward with a faster listing process, making it a potential competitor for second EV startup status in India behind Ola Electric. Ather Energy has plans for an IPO, which will impact the market, though the investors require information about how it will be structured and when it will launch.

Equity Conversion: A Crucial Step Towards IPO Readiness

Ather Energy executed a major development to indicate its readiness for IPO by transforming 1.73 crore outstanding CCPS into 24.04 crore fully paid-up equity shares. The action to align with the disclosure standards of SEBI’s Issue of Capital and Disclosure Requirements (ICDR) received board approval from Ather Energy on March 8, 2025 for the mandatory conversion of all CCPS to equity shares before submitting the Red Herring Prospectus (RHP). 

Through this strategic move, Ather removes potential legal roadblocks that allow a clear path to its successful IPO release.

IPO Size and Structure: Key Financial Highlights

According to recent filings, Ather's IPO will comprise:

•    Fresh Issue: INR 3,100 crore worth of equity shares.
•    Offer for Sale (OFS): Up to 2.2 crore equity shares by early investors and promoters.

Prominent stakeholders like Tiger Global, Caladium Investments, NIIF, Binny Bansal’s 3 State Ventures, and co-founders Tarun Mehta and Swapnil Jain are set to dilute their stakes in the OFS.

However, Hero MotoCorp, holding a 37.2% stake in Ather, will not participate in the OFS.
Additionally, Ather plans to raise INR 620 crore in a pre-IPO placement to boost its financial position before the public offering.

Utilisation of IPO Proceeds:

Ather Energy has a strategic plan to use IPO funds for organizational operations expansion and internal business enhancement. Ather Energy will direct the funds acquired through the IPO toward the following purposes: 

• Ather Energy will use its IPO funds to boost research and development initiatives, which include better batteries and improved vehicle software.
• The company plans to use IPO funds to launch marketing activities for both brand exposure and sales increase.
• Developing manufacturing infrastructure, with a planned electric two-wheeler factory in Maharashtra.
• The company plans to increase capacity to serve increasing EV market demands in India. 
• General corporate purposes and debt reduction.

Market Expansion and Competitive Outlook

The company has maintained continuous market expansion and research development activities to dominate India's electrified vehicle sector. Ather Energy upgraded its branch 'The Juggernaut' in Bengaluru to boost testing and development abilities throughout its product validation system.

Investors will analyze Ather's revenue performance together with its profits and its strategic direction due to its established premium EV brand status. Ather Energy needs to prove financial stability and market expansion potential to match the reception Ola Electric received from investors during its IPO.

EV IPO: What Lies Ahead?

The public offering from Ather occurs at a time when India shows increased interest in electric vehicles. The public listing efforts of several EV players started after Ola Electric launched its INR 6,145 crore IPO during August 2024. The parent company of Ampere Electric (Greaves Electric Mobility) along with Pure EV from Hyderabad plan to launch their Initial Public Offerings in 2025. The successful completion of Ather's IPO by the Indian market will create a landmark event in EV industry growth, thereby strengthening market sentiment to enable more EV startups to access public investor funding.

Key Takeaways for Investors

• Ather plans to launch its IPO through the stock market during April 2025.
• The offering contains fresh capital worth INR 3,100 crore and secondary shares from 2.2 crore shares in the offer for sale program. 
• The IPO funds allocated to Ather Energy will be used for R&D initiatives, together with manufacturing plant expansions and marketing efforts, and debt reduction programs.
• Ather stands strong in its electric vehicle market segment, which makes it appealing to investors.
• Investors will analyze Ather's financial data and strategic plan along with performance outcomes as the pending IPO approaches because they need to evaluate its prospects in India's electric vehicle market.

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