Ather Energy’s IPO: All You Need To Know

30 Apr 2025 , 11:22 AM

The Offer

Electric two-wheeler maker Ather Energy is likely to go public through IPO. The offer specifics are as follows:

Fresh Issue: The Offer consists of a Fresh Issue.

Offer for Sale: As part of this offer, there is an offer for sale of up to 11.05 million Equity Shares. The Promoters, also comprising Swapnil Babanlal Jain and Tarun Sanjay Mehta, are offloading up to 980,000 Equity Shares each. The weighted average price at which such acquisition was made by these promoters is ₹21.09 per Equity Share.

Managers: Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, JM Financial Limited and Nomura Financial Advisory and Securities (India) Private Limited are the book running lead managers (BRLMs) to the issue.

Ather Energy’s IPO is an important event of the company where it intends to raise money for its business expansion. The offer documents indicate that investors can submit their bids in the IPO with the Bid/Offer Closing Date on April 30, 2025.

Objective of the offer

Business Growth and Expansion

Business expansion, including land purchase, infrastructure development and production equipment.

• Expansion related to a new E2W plant in Maharashtra, India.

Research and Development

• Reinvest in R&D to differentiate product offerings and remain competitive in the industry. Develop new battery packs and battery management systems for a new motorcycle platform.
• Provide users with a greater experience through new firmware, algorithms, HMI, applications and data platform.

New Product Launches and Product Enhancements

• Introduce new products and improve the company’s product line.
• New innovations are included such as the Halo smart helmet and Halo Bit.

 

General Corporate Purposes

• Fund general corporate purposes, including working capital needs and other purposes.
• Repay any outstanding borrowings, in whole or in part, or make guaranteed interest payments on borrowings
• Marketing Expenses

* Please note that the exact uses of funds are not explicitly described in the included text but that these uses of funds can be inferred from the information presented.

Industry Overview

Indian Two-Wheeler Industry:

India’s 2W industry is the largest in the world by volume. Its rich history dates back to 1950s. However, a growth surged happened when foreign players entered in the 1980s. Entry of Japanese brands Honda, Yamaha and Suzuki led to significant change in industry landscape.

Rapid Evolution

The industry has changed considerably since its inception. Government policies such as Automotive Mission Plan and National Auto Policy accelerated the pace of evolution. These also resulted in an increase in demand for two wheelers, especially in the rural market where vehicle ownership was going mainstream. The industry is now dominated by domestic players like Hero MotoCorp, TVS Motor and Bajaj Auto. In addition, foreign players have a significant presence. The industry is expected to undergo a significant transformation in the coming years, due to the growth of the electric vehicles (EV), which is experiencing explosive market growth including for e-scooters.

Shifting Market Trends

There’s a transformative shift taking place in the Indian two-wheeler market towards EVs supported by government incentives, rising environmental consciousness, and changing taste towards cleaner forms of transportation. Successful players need to adapt rapidly and capitalise.

India’s E2W Market

The Indian electric two wheeler (E2W) industry has shown promising growth in the last few years. The industry expanded at a CAGR of 101.7% from fiscal 2019 to fiscal 2024. A number of factors have contributed to the industry’s expansion, including the rising need for eco-friendly transportation options.

Size and Growth

India is the world’s largest market for motorized two-wheelers by volume as at CY 2023, with domestic sales of 18.4 mn units in fiscal 2024. The motorcylces segment contributes about 73 per cent to the total auto market by volume, while the passenger vehicles segment contributes only 16.7 per cent. The E2W vertical in India has witnessed significant growth selling over 1 lakh units in FY2024, nearly three times its volumes in FY2023.

Key Driving Factors

There are a number of factors driving growth in the E2W industry.

Growing pollution awareness: Strict emissions norms for vehicles (including two-wheelers) to curb harmful emissions and promote sustainable mobility through transitioning towards electric vehicles.

Rise in fuel costs: With the two-wheeler industry being highly sensitive to increase in fuel prices, there is a rise in the cost of operating a vehicle making electric two-wheelers more sought after due to a low cost of operating.

Government support: Policies like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which aimed to push for e-vehicles and reduce the dependence on oil/gas imports, have encouraged the automobile industry to move away from fossil fuel consumption.

Penetration and availability: Growing penetration and availability of electric two-wheelers in the market, supported by the right kind of promotion and infrastructure.

 

Ather Energy: Building the Future of Sustainable Commuting

Early Beginnings

Founded in 2013 by entrepreneurs Tarun Mehta and Swapnil Jain, Ather Energy had set out with an exciting and challenging mission to disrupt the two-wheeler market in India with electric drivetrains. The early days of the company was about creating state-of-the-art electric two-wheelers with a lot of attention to detail on the quality and user experience.

Key Milestones

Ather Energy reached several milestones in its short but storied history:

• Building a complete product ecosystem – Charging solutions, accessories, Atherstack
• Focus on capital efficiency in its value chains, control over crucial components and operational flexibility
• Significant next steps in sustainability and establishing corporate ESG (Environmental, Social, Governance) committee to champion accountability and sustainability
• The Ather 450, featured a touchscreen dashboard, internet connectivity and fast charging. Ather Energy introduced the Ather 450X, Ather 450S, Ather 450 Apex, and the Ather Rizta had the Ather Rizta marketed as a regular ICIS Scooter.
• The firm adopted several eco-friendly measures such as on-site solar panels to meet 11 per cent of their energy demand, and a 120 KLD (kilo litres per day) sewage treatment plant.

Competitive landscape

Ather Energy competes in a fast growing and highly competitive two-wheeler sector in India, where a growing number of established and new players are fighting for a share of market. Key competitors in the market:

• Hero Electric: A reputed name in the EV space of India, the company has a strong portfolio of electric two-wheelers and three-wheelers.
• Ola Electric: A fast-rising Indian player that makes electric two-wheelers and electric cars.
• TVS Motor Company: A key motorcycle and scooter maker that is increasingly finding success in electric vehicles.
• Bajaj Auto: One of the most prominent Indian two-wheeler makers with a variety of electric vehicle offerings

A quick analysis of competitors:

• Hero Electric: Offers good range of products and solid dealership network.
• Ola Electric: Offers electric two-wheelers and electric cars, with a focus on affordability and innovation.
• TVS Motor Company: Is widely known for its innovative and technology driven brands, making it unique among its competitor brands.

Anlaysis of Ather’s Strengths & Weaknesses

Focus on quality and user experience: Thanks to the in-house nature of its design and development processes. This allows the company to manage some of the key variables affecting product quality and adapt new technologies with speed.

Cutting-Edge Ecosystem: Atherstack, the company’s proprietary built-from-scratch full stack hardware-software platform which bundles cloud, connectivity, data, intelligence, and telematics features for its products including over-the-air updates and ride statistics.

Value-Added Products: Ather Energy’s products are high-end of the price spectrum, meant for customers who want more power or convenience.

Robust Governance Practices: The company has a sound governance process, that involves various committees, to provide effective oversight and decision making.

Strong Leadership: Ather Energy has a strong leadership and a company is headed by a experienced founder team with a strong leadership team.

Some of the challenges are:

Reliance on Government Subsidies: The growth of the company’s business is influenced by the availability of government-sponsored incentives, grants and tax credits and the continued ability of the government to support alternative energy production and usage. Some of these programs have been discontinued or reduced in the past and may be discontinued or reduced in the future.

Restricted Geographical Diversification: The company is primarily present in the south, where approximately 61% of the sales occurred in FY2024.

Key Components Dependence: The group purchase most of its key components, including lithium-ion cells and motors, from third-party suppliers, which may subject it to risks associated with supply chain.

High Burn Rate: The company is currently making losses. This affects its ability to continue to invest and differentiate.

Financial Overview

A blip in revenue growth FY24

The revenue of company has increased from INR 409 cr to 1781 cr in FY23. FY24 witnessed a dip in revenue to INR 1753 cr. However, 9M FY25 shows a more than 20% growth in topline vs 9MFY24.

Key Drivers of Growth

Growth in revenue is driven largely by sales of existing models and launch of new models like Ather Rizta. The company’s emphasis on innovation and penetration is also likely to fuel growth.

The key reason behind the company’s deteriorating growth profile in FY24 was the slashing of central government’s FAME subsidy. This had increased E2W prices and led to postponement of purchases.

Still in the red:

The company’s high R&D spend, along with employee benefits cost, among others, have been hurting the bottom line. But the company’s investment in innovation and expansion is expected to drive growth, build scale and ultimately improve profitability.

Financial Summary & Peer Comparison

Figure: Market Share Comparison

Manufacturer	9M Ended Dec 2024	9M Ended Dec 2023	FY 2024	FY 2023	FY 2022
Ather Energy Ltd.	10.7%	11.3%	11.5%	10.6%	7.9%
Ola Electric Mobility Ltd.	34.1%	33.0%	35.1%	21.0%	5.7%
TVS Motor Co. Ltd.	19.4%	19.6%	19.3%	11.3%	3.9%
Bajaj Auto Ltd.	18.1%	10.4%	11.4%	3.9%	2.8%
Hero MotoCorp Ltd.	4.3%	1.6%	1.9%	0.1%	0.0%
Greaves Electric (Ampere)	3.3%	7.2%	5.7%	12.0%	10.1%
Okinawa Autotech Pvt. Ltd.	0.4%	2.9%	2.2%	13.2%	18.9%
Hero Electric Pvt. Ltd.	0.2%	1.6%	1.2%	12.3%	27.2%
Others	9.5%	12.4%	11.7%	15.6%	23.5%

Source: Ather RHP

Figure: Financial Comparison

Company	Metric	9M Dec 2024	9M Dec 2023	FY 2024	FY 2023	FY 2022
Ather Energy Ltd.	Revenue	15,789	12,304	17,538	17,809	4,089
	Profit/(Loss)	(5,779)	(7,764)	(10,597)	(8,645)	(3,441)
	EBITDA	(3,700)	(4,229)	(6,494)	(6,867)	(2,550)
Ola Electric	Revenue	39,030	34,120	50,098	26,309	3,734
	Profit/(Loss)	(14,060)	(11,680)	(15,844)	(14,721)	(7,842)
	EBITDA	(7,430)	(7,950)	(10,341)	(11,007)	(7,176)
Bajaj Auto Ltd.	Revenue	383,482	333,155	448,704	364,554	331,447
	Profit/(Loss)	55,229	56,968	77,082	60,602	61,659
	EBITDA	82,767	77,370	104,652	81,673	71,136
Hero MotoCorp Ltd.	Revenue	309,536	281,719	377,886	341,584	295,513
	Profit/(Loss)	32,071	27,987	37,422	27,999	23,291
	EBITDA	50,428	45,876	60,839	46,659	38,007
TVS Motor Co. Ltd.	Revenue	328,432	291,023	391,447	319,740	243,553
	Profit/(Loss)	16,823	13,670	17,785	13,095	7,309
	EBITDA	48,524	41,737	56,058	41,647	27,900
Eicher Motors Ltd.	Revenue	136,292	122,797	165,358	144,422	102,978
	Profit/(Loss)	33,723	29,306	40,010	29,139	16,766
	EBITDA	48,307	42,849	58,505	43,539	26,732

Source: Ather RHP

 

Figure: Valuation Comparison

Company	Face Value (₹)	Closing Price (₹) as on Mar 28, 2025	Revenue (₹ million)	EPS (₹) Basic / Diluted	NAV/share (₹)	P/E Ratio	RoNW (%)
Ather Energy Ltd.	1	NA	17,538	(47) / (47) *	24 *	NA	(194%)
Hero MotoCorp Ltd.	2	3,723	377,886	187 / 187	884	20	21%
Bajaj Auto Ltd.	10	7,879	448,704	273 / 273	935	29	29%
Ola Electric Ltd.	10	53	50,098	(4) / (4)	6	NA	(78%)
TVS Motor Co. Ltd.	1	2,420	391,447	36 / 36	143	68	26%
Eicher Motors Ltd.	1	5,348	165,358	146 / 146	657	37	22%

Source: Ather RHP

 

 

 

Figure: Summary Financials

Particulars	9M FY24	9M FY23	FY24	FY23	FY22
Revenue from Operations	15,789	12,304	17,538	17,809	4,089
Other Income	385	233	353	209	49
Total Income	16,174	12,537	17,891	18,018	4,138
Total Expenses	21,953	18,555	26,742	26,663	7,579
Loss Before Tax (after exceptionals)	(5,779)	(7,764)	(10,597)	(8,645)	(3,441)
Net Loss	(5,779)	(7,764)	(10,597)	(8,645)	(3,441)
Other Comprehensive Income	(17)	(20)	(26)	6	(5)
Total Comprehensive Loss	(5,796)	(7,784)	(10,623)	(8,639)	(3,446)
EPS (Basic & Diluted, ₹)	(23)	(36)	(47)	(48)	(27)

Source: Ather RHP

Conclusion:

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