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Ather files DRHP to raise Rs 3,100 Cr via IPO; Hero MotoCorp won’t sell shares

Entrackr · 3m

Electric two-wheeler firm Ather Energy has filed its draft red herring prospectus (DRHP) with the Security Exchange Board of India (SEBI) for an initial public offering (IPO) on Monday. Ather will be the second two-wheeler EV maker to make its debut on the stock exchange. Ola Electric went public last month. The firm has proposed to raise funds through a fresh issue of equity shares aggregating up to Rs 3,100 crore (approximately $370 million) and an offer for sale (OFS) of up to 2.2 crore equity shares, according to the DRHP. GIC Ventures through its subsidiary Caladium Investment will divest 47.8% of the total offer for sale (OFS) while Tiger Global and 3 States Ventures will offload 18.1% and 2.18% of the offer for sale. Tarun Mehta and Swapnil Jain will also participate by offering 10 lakh shares each. The fresh issue and OFS will be allotted at a face value of Re 1 while the company will decide the price band and minimum lot band in consultation with the book-running lead managers shortly. According to the DRHP, Hero MotoCorp is the largest external shareholder with 37.2% followed by GIC (Caladium Investment) and NIIF which hold 15.04% and 10.29% respectively. However, Hero MotoCorp won’t participate in the OFS, which is a bit surprising for the observers. Its co-founders Tarun Sanjay Mehta and Swapnil Babanlal Jain cumulatively hold 13.26% of the company. Axis Capital, HSBC Securities, Nomura Financial, and JM Financial are the book-running lead managers of the issue. The company will use the proceeds from the fresh issue of shares on capital expenditure to establish their E2W factory, repayment of borrowing, research and development, and expenditures towards marketing, the DRHP further added. Ather recently turned unicorn after $71 million in funding from existing investor National Investment and Infrastructure Fund. The Bengaluru-based firm became the second unicorn from the electric vehicle space after Softbank-backed Ola Electric. Ather has raised over $500 million out of which $125 million came in the last three months for the Mehta-led company. The company also disclosed its Q1 FY25 numbers and it recorded Rs 339 crore in revenue in the first quarter of FY25 with a net loss of Rs 183 crore in the same period. In FY24, the firm reported a modest decline in its revenue which stood at Rs 1754 crore. Ather’s customer base increased by 34% to 1,14,000 in FY24. During FY23, the firm posted 270% customer growth, as per the DRHP. Notably, during the previous fiscal (FY24), Ather imported 28% of the raw materials from China where the figures stood at 10% in FY23. Ather competitor Ola Electric posted Rs 1,644 crore in revenue in Q1 FY25, marking its net loss down by 17%. Among two-wheeler EVs, Ather had 9% market share as of Q1 FY25 while Ola was at the top with 49%.