Ather Energy, a leading Indian electric scooter manufacturer, is planning to raise $530 million in its initial public offering (IPO) to capitalize on the growing demand for electric vehicles in the world’s third-largest auto market. The Bengaluru-based startup, which competes with rival Ola Electric, is targeting a valuation of $1.5 billion to $2 billion and plans to use the funds raised to fund a new manufacturing facility in the state of Maharashtra, repay borrowings, and for research and development.
Ather Energy has been a major player in the electric two-wheeler market, commanding around 19% of the market share as of late August, according to government data. The company has received backing from Hero MotoCorp and the National Investment and Infrastructure Fund, and has raised around $500 million in funding across several rounds. Ather’s revenue stood at $213 million in the fiscal year ended March, with a loss of $126 million.
The Indian electric vehicle market is heating up, driven by government incentives and rising fuel prices. The government aims to have 30% of private cars and 70% of commercial vehicles running on electricity by 2030. Incumbent automakers are ramping up their efforts to increase their presence in the market, with Bajaj Auto reporting a market share of 11% at the end of June this year.
Ather Energy faces stiff competition from well-funded startups and established automakers, including Ola Electric, TVS Motor, and Bajaj Auto, which hold market shares of 31%, 20%, and 19%, respectively. Hero MotoCorp has a smaller market share of 5%. The company plans to sell new shares worth $370 million in the IPO, as well as up to 22 million shares from existing investors.
The IPO plans come as India’s electric vehicle market is expected to continue to grow, driven by government incentives and rising fuel prices. The country aims to have 30% of private cars and 70% of commercial vehicles running on electricity by 2030. Ather Energy’s IPO would be one of the few major public offerings in the Indian tech and startup space in recent years, after the highly successful IPO of rival Ola Electric.
The IPO is being led by Axis Capital, HSBC, JM Financial, and Nomura, and the company plans to use the funds raised to fund a new manufacturing facility, repay borrowings, and for research and development. The IPO is expected to be a significant milestone for the company, which has been a major player in the electric two-wheeler market for several years.
Overall, Ather Energy’s IPO plans reflect the growing importance of the electric vehicle market in India and the company’s ambition to expand its presence in the market. The IPO would be a major fundraising effort for the company, which has received significant backing from investors in the past.
