Ather Energy IPO: How Is The Electric Two-Wheeler Maker Valued

Ather Energy filed its draft red herring prospectus with the Securities and Exchange Board of India. It will be the second pure-play electric two-wheeler company to approach the stock market.

The company also witnessed one of the marquee investors, Sachin Bansal, sell part of his stake at Rs 210.73 apiece to promoter Hero Motocorp on Aug. 5, 2024.

Bansal sold 1.05 million shares at Rs 210.73 apiece to the two-wheeler maker, valuing the company at Rs 9,422 crore, or $1.12 billion.

The IPO-bound company recently sold some of its stake to the India-Japan Fund through NIIF in series-G funding, where it issued 1.65 crore cumulative convertible preference shares at Rs 363 apiece, raising Rs 600 crore. These preference shares were converted into 3.18 crore equity shares, giving it a share value of Rs 188.52 apiece on conversion.

The company plans to use the proceeds of the issue for the following purposes:

• Capital expenditure: Rs 927.2 crore.

• Repayment of borrowings: Rs 378.2 crore.

• Investment in research and development: Rs 750 crore.

• Expenditure towards marketing: Rs 300 crore.

The EV maker has witnessed its loss triple in the last three years. The company posted flat revenues for the year ended March 2024, according to the DRHP. It reported revenue of Rs 1,753.80 crore in fiscal 2024, compared to Rs 1,780.90 crore in the previous financial year. Loss after tax stood at Rs 1,059.7 crore, compared to loss of Rs 864.5 crore in the previous year.

The EV maker recorded an increase in sales volumes to 1,09,577 in fiscal 2024, from 92,093 in fiscal 2023.

Axis Capital, HSBC, JM Financial and Nomura are the lead managers to the issue. The issue will now go through vetting by the market regulator before final observations will be issued. Ather is expected to hit the street before the year-end.