Ather Energy Restarts IPO Process; Sets Price Band at Rs 304–321

Ather Energy on Tuesday submitted its draft red herring prospectus to the Securities and Exchange Board of India (SEBI), restarting its initial public offering after a two-and-a-half month pause. The electric scooter maker set its IPO price band at Rs 304 to Rs 321 per share, with a face value of Re 1. Anchor investor allocations are scheduled for April 25.

The Bengaluru-based company said proceeds would support development of its electric two-wheeler ecosystem, which covers vehicle design, battery pack assembly, charging network rollout and related software. Early backers such as Tiger Global and NIIF stand to realize gains as Ather seeks to tap an expanding E2W market.

Hero MotoCorp, holding roughly 40% of Ather’s equity, confirmed it will not offer any shares in the public issue. Grey market activity shows a premium of Rs 7, pointing to a potential listing near Rs 328, about 2.2 per cent above the top of the IPO band. Traders note grey market premiums have fallen from Rs 17 to Rs 7 over the past three sessions.

Promoters Tarun Mehta, Swapnil Jain and Hero MotoCorp together control 156.1 million shares, or 51.8 per cent of fully diluted equity. The issue, sized at Rs 2,981 crore with an offer-for-sale of Rs 355 crore, allows founders to offload 1.96 million shares. At Rs 321 a share against an average acquisition cost of Rs 21.09, founder returns would reach 1,422 per cent.

Peer group data in the red herring shows P/E ratios of 20 for Hero MotoCorp, 29 for Bajaj Auto, 68 for TVS Motor, 37 for Eicher Motors and unlisted valuation for Ola Electric Mobility. Ather’s model rests on integrated design, software services, premium positioning and capital efficiency.

Manufacturing occurs at its Tamil Nadu plant, with capacity for 420,000 vehicles and 379,800 battery packs as of March. Its product line includes the Ather 450 performance series and the Ather Rizta convenience series, the latter featuring a larger seat, 56-liter storage, Alexa voice commands and traction control.

Industry data show India sold 18.4 million two-wheelers in fiscal 2024, with 15.3 million units in the nine months to December. Annual market growth stood at 11 per cent year-on-year, and forecasts project a compound annual growth rate of 7 per cent through fiscal 2031, reaching up to 30 million units.

Financials in FY24 revealed a tax-before-loss of Rs 1,059.7 crore on revenue of Rs 1,753.8 crore, compared with a loss of Rs 864.5 crore on revenue of Rs 1,780.9 crore in the prior year. Key risks include reliance on third-party suppliers for critical components, potential changes to government electric vehicle incentives and customer adoption rates.

Half of shares allotted to anchor investors will remain locked for 90 days, with the balance locked for 30 days from allotment.