Ather Energy reduces IPO size to Rs 2,626 crore amid global market volatility: Report

Ather Energy, known for its innovative electric scooters, has announced a reduction in the size of its initial public offering (IPO) to Rs 2,626 crore, a notable decrease from its prior target of Rs 3,100 crore. This decision comes amidst a backdrop of global market turbulence influenced by US tariff concerns which have notably impacted stock markets worldwide. The Tiger Global-backed firm plans to issue new shares to achieve its revised fundraising goal. In alignment with this reduction, existing shareholders will now offload 11.1 million shares, significantly less than the initial plan to release 22 million shares, Reuters reported.

Established in 2013 by former students of IIT Madras, Tarun Mehta and Swapnil Jain, Ather Energy has become a key player in India's electric mobility sector. Ather is currently ranked as the fourth largest electric two-wheeler company in the country, following Ola Electric, TVS Motor Company, and Bajaj Auto. The company specializes in the design, production, and sale of intelligent electric scooters such as the 450 Apex, 450S, 450X, 450X Pro, and the newly introduced Ather Rizta.
 
Hero MotoCorp, holding a 40% stake in Ather, remains steadfast in its decision not to sell its shares during this IPO. Hero maintained its stance that it will not sell its shares in the IPO. This commitment comes as foreign investors continue to withdraw from Indian equities, having net sold approximately $33 billion since the latter half of the last fiscal year. The global and local market conditions, characterised by volatility and weak consumption trends, have undoubtedly influenced Ather’s strategic financial decisions. 

Co-founders Tarun Mehta and Swapnil Jain will be selling 980,000 shares each in the Offer for Sale (OFS). Additionally, important institutional investors like Caladium Investment Pte Ltd, National Investment and Infrastructure Fund II (NIIF II), Internet Fund III Pte Ltd, IITM Incubation Cell, IITMS Rural Technology and Business Incubator, and Amit Bhatia will also be taking part in the OFS.

Ather Energy has outlined plans to commence share bidding over a three-day period starting April 28, with anchor investors set to partake in a private stock placement on April 25. 

The proceeds from this IPO will be directed towards establishing a new manufacturing facility in Maharashtra and bolstering research and development efforts. These investments are strategic moves as Ather seeks to strengthen its market position and expand its operational capacity. 

Despite being a pioneer in the Indian e-scooter market since 2018, Ather has faced stiff competition from larger players like Ola Electric and TVS Motor. These competitors benefit from extensive distribution networks and competitive pricing strategies that have successfully captured significant market share. Nevertheless, Ather reported a reduced loss of Rs 578 crore for the nine months ending December, a marked improvement from Rs 776 crore the previous year. This financial progress is primarily attributed to robust sales of its newly launched electric family scooter, Rizta.

The Indian electric vehicle market continues to evolve rapidly, with Ather striving to regain its competitive edge. The company’s revised IPO strategy and its focus on expanding production capabilities signify its commitment to long-term growth and innovation. As Ather looks to navigate the challenges posed by both domestic and international market dynamics, the forthcoming IPO will be a critical step in securing the necessary capital to fuel its ambitious expansion plans.