Here’s Why Ather’s IPO Could Be the Next Big Thing in EV

Ather Energy, backed by $71 million in funding from NIIF, is poised to go public and could be a game-changer for India’s EV market.

Key Highlights:

• Ather is set to file the Red herring prospectus for IPO by September 2024.
• Ather Energy converted to a public limited company for IPO launch this year.

Ather Energy, India’s leading electric two-wheeler manufacturer, is poised to make a significant impact on the country’s rapidly expanding electric vehicle (EV) market with its upcoming IPO. Ather Energy has recently secured a whopping $71 million (INR 600 crore) funding from the National Investment and Infrastructure Fund (NIIF), valuing the company at a staggering $1.3 billion. This milestone makes Ather the fourth unicorn startup of 2024.

Founded in 2013 by IIT Madras graduates Tarun Mehta and Swapnil Jain, Ather Energy has sold over 1.73 lakh scooters in India till July 2024. Recently, the company is rumored to go public in the second half of 2024, following its conversion to a public limited company.

This is confirmed by the company’s recent filings with the government’s Registrar of Companies (RoC). This potential Ather IPO is generating significant buzz in the Indian EV market, and here’s why it could be a game-changer for India’s EV sector.

Strong Investment Backing

Ather Energy has attracted investments from several prominent players, including the National Investment and Infrastructure Fund (NIIF) with $71 million, Hero MotoCorp holding a 40% stake, and venture capital firms like Tiger Global, Caladium Investment, and Herald Investment Management. Additionally, notable investors such as Sachin Bansal, co-founder of Flipkart, and GIC, Singapore’s sovereign wealth fund, have also backed Ather.

Ather Energy has been making headlines with its latest developments in the electric scooter segment. The company is set to file its draft red herring prospectus within the second week of September 2024. A red herring prospectus (RHP) is an initial document that a company prepares when it plans to go public through an initial public offering (IPO).

Additionally, Ather has recently launched new models, including the Ather Rizta, a family-oriented electric scooter. Also, the company recently made its second international market expansion in Sri Lanka following Nepal in November 2023. Notably, Ather has also converted to a public limited company in June 2024, an important step toward the launch of Ather’s IPO.

Replying to Ecogears desk questions on IPO launch, Ather Energy’s co-founder and CEO, Tarun Mehta, said, “Our business will need capital for another 18-24 months before becoming profitable. The company also plans to go public around the same time or maybe faster”.

This statement by Ather’s co-founder underscores Ather’s strategic approach to growth and its commitment to be the leading player in the ever-growing Indian EV market.

India’s EV market is an emerging market with significant growth potential. The market was valued at ₹1,440 crores (approximately $190 million) in 2020 and is expected to reach ₹50,900 crores (approximately $6.7 billion) by 2025, growing at a CAGR of 43.13%.

In 2024, electric two-wheelers dominated the market with a 63.4% share, followed by electric three-wheelers at 31.4%, and electric four-wheelers at 5.2%. Key players in the electric two-wheeler segment included Ola Electric with a 33% market share, Hero Electric with a 34.6% market share, Okinawa Autotech with 23.4%, Ather Energy with 14.5%, and Ampere Vehicles with 10.4% as of July 2024.

Several trends are shaping the future and raising investor’s confidence in India’s EV sector. Government initiatives such as the FAME-II schemes, tax incentives, decline in battery costs, and investment in EV charging infrastructure development are driving growth. There is an increasing demand for electric vehicles as consumers become more environmentally conscious about their benefits and long-term cost-effectiveness.

Ather Energy’s potential IPO could indeed be the next big thing in India’s EV market. With strong financial backing, innovative products, and a rapidly growing Indian EV market, Ather is well-positioned to lead the electric revolution in India. Investors and consumers alike are eagerly watching the company’s movements as Ather gears up for its IPO launch this year.

While we gather more information on Ather’s IPO, have a look at Ather’s latest offerings for the EV market:

Also read: Ather Rizta family electric scooter launched in India