IPO-bound electric two-wheeler manufacturer Ather Energy is on the verge of delivering substantial returns to its promoters and initial backers, as the company prepares for its initial public offering (IPO) next week. With a price band set between Rs 304 to Rs 321 per share, the IPO will open on April 28 and close on April 30, with allotment results to be finalized by May 2 and listing scheduled for May 6.

Tiger Global's huge windfall

One of the biggest beneficiaries of this public offering is Internet Fund III Pte, an early investor backed by Tiger Global. Having entered Ather Energy in 2015, its average share acquisition cost stands at just Rs 38.58. The fund currently holds a 6.56 percent stake amounting to 1.98 crore shares. At the IPO's upper price band of Rs 321, this holding is valued at over Rs 655 crore, implying a return more than 7 times the original investment.

Strong gains for sovereign funds GIC and NIIF

Another notable gainer is Singapore’s sovereign wealth fund GIC, which entered through Caladium Investment in 2022. Caladium’s 15.43 percent stake, or 4.65 crore shares, were acquired at an average price of Rs 204.24 per share, and are now valued at around Rs 1,493 crore.

Likewise, National Investment and Infrastructure Fund (NIIF), which also entered in 2022, holds 6.77 percent stake or 2.04 crore shares at an average price of Rs 183.71 per share. At the IPO price ceiling, NIIF’s investment is valued at Rs 655 crore.

Co-founders and Hero MotoCorp to benefit significantly

Co-founders Tarun Mehta and Swapnil Jain each hold 6.81 percent stakes, or 2.06 crore shares, with an average acquisition cost of Rs 43.27 per share. Their holdings are valued at around Rs 659 crore each at the top end of the price band.

The biggest stakeholder, however, is Hero MotoCorp, which owns a 38.19 percent stake, translating to 11.51 crore shares. Acquired at an average price of Rs 145.99 per share, the holding is now worth approximately Rs 3,694 crore.

IPO structure and valuation

The IPO will include a fresh issue worth Rs 2,626 crore and an offer for sale of up to 1.1 crore shares, which totals to about Rs 354.76 crore at the upper end of the price band. This pegs the total issue size at Rs 2,980.76 crore, revised down from the earlier planned Rs 4,000 crore. The post-issue valuation of Ather Energy stands at roughly Rs 11,956 crore.

Financials ahead of listing

For the nine-month period ending December 2024, Ather Energy reported revenue of Rs 1,578.90 crore, up from Rs 1,230.40 crore in the same period a year ago. Meanwhile, the company managed to narrow its net loss from Rs 776.40 crore to Rs 577.90 crore, showing improved cost efficiency.

Second pure-play EV firm to list after Ola Electric

Ather Energy’s IPO marks it as the second major Indian electric vehicle (EV) company to go public, following Ola Electric’s listing last year. The growing EV market in India, coupled with government incentives and increasing consumer interest, offers promising growth potential for the sector.

Lead managers and subscription timeline

The public issue is being managed by top-tier investment banks including Axis Capital, HSBC Securities and Capital Markets (India), JM Financial, and Nomura Financial Advisory and Securities (India). The anchor book opens on April 25, giving institutional investors a first shot at the offering.

Conclusion

With strong backing from global investors, consistent revenue growth, and a clear path toward profitability, Ather Energy’s IPO appears poised to generate significant market interest. The valuation uptick for early stakeholders further boosts confidence in the company's long-term viability and attractiveness for new investors.

Investors keen on India’s EV revolution may find the Ather Energy IPO to be a compelling opportunity, as the company continues to solidify its position in a rapidly evolving market.

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