Ather Energy IPO Done. What Next?

The initial public offering of Ather Energy Ltd. sailed through on the final day of subscription, but the lacklustre interest from high networth investors stuck out like a sore thumb.

With that out of the way, the focus now shifts to life after listing, especially on the path to profitability of the Rizta maker. Against that backdrop, here’s some essential reading:

Ather Energy Has A Margin Lever In Play In Quest For Profitability: In the nine months through Dec. 31, 2024, the Rizta maker drew 6% of its revenue from the software business at an Ebitda margin of 53-56%, according to its red-herring prospectus. That helped prop up adjusted gross margin to 19% from 7% in the year-ago period, even as hardware subsidy waned by 77%.

Clearly, the ‘Ather Propack’ isn’t simply  a value addition for the customer.

Breaking new grounds: The Bengaluru-based EV maker is set to break ground for its new plant in Maharashtra immediately after listing, in an attempt to redraw its growth curve.

After the groundbreaking ceremony in May 2025, the Rizta maker will commission the first phase of its third facility in Chhatrapati Sambhaji Nagar by July 2026 to produce 500,000 units annually, according to the company’s red herring prospectus. Ather will channel nearly Rs 1,000 crore from the IPO proceeds towards this endeavour. The production capacity will double to a million units in the second phase of the Rs 2,000-crore project. A timeline for the same wasn’t immediately available.

But why in Maharashtra? There are five reasons.

The Battle of the Bengaluru Boys: Ather Energy Ltd. has doubled its adjusted gross margin and reduced loss since the Bengaluru-based EV maker first filed its IPO papers, so much so that its financials are now comparable to those of crosstown rival and India’s former No. 1 electric two-wheeler maker Ola Electric Mobility Ltd.

Here’s a look at how  they stack up, financially.

Maharashtra’s new EV policy: The Maharashtra Electric Vehicle Policy, 2025, with a total outlay of Rs 1,993 crore, will be applicable  for the next five years until 2030.

TVS’ EV business: TVS Motor Co. drew nearly  a tenth of its earnings from its EV business in the recently concluded financial year, underscoring the growing importance of electric mobility to an automaker’s topline. 

Mahindra-SML Isuzu Acquisition: The benefits of Mahindra-SML Isuzu acquisition will start showing immediately in the company’s truck and bus business, Mahindra Group CEO Anish Shah said in an interaction with NDTV Profit. 

Watch him break down the Mahindra-SML Isuzu deal to its brass tacks, and explain why he believes “valuation is in the eye of the beholder”.

Mahindra & Mahindra is set to acquire SML Isuzu Ltd. in a deal valued at Rs 555 crore to bolster its presence in the large commercial-vehicle segment.

The Scorpio-maker by revenue will pick up a 43.96% stake—or 63,62,306 shares—held by promoter Sumitomo Corp. and 15% stake—or 21,70,747 shares—from Isuzu Motors Ltd. at Rs 650 per share, according to an exchange filing on Saturday. That pegs the valuation of the 58.96% stake purchases at Rs 554.63 crore.

Separately, M&M will trigger an open offer to acquire 26% stake, equivalent to 37,62,628 shares, at Rs 1,554.60 apiece. This is in accordance with India’s market regulations.

Following the transaction, SML will become a listed subsidiary of M&M. The brand name ‘Isuzu’ will be dropped from the name.

On April 30, 1948, the world saw the Land Rover for the first time.

The Series 1, debuted at the Amsterdam Auto Show, had a boxy, utilitarian design, four-wheel drive and a canvas roof. Features such as passenger seat cushions, doors, a heater and spare tires were initially considered extras and cost more.

The rugged Land Rover was well-received by the public and ended up being used not just for agricultural work, but by police forces, military organisations, aid workers in remote places and travelers on expeditions where road conditions were poor or non-existent.

In 1970, the Range Rover, a more comfortable, luxurious version of the Land Rover, was launched. The Discovery, a less expensive version of the Range Rover, made its public debut in 1989. 

But by that time, the company had experienced ownership changes 

In 1967, Rover became part of Leyland Motors (later called British Leyland). British Aerospace later acquired Land Rover. In 1994, BMW acquired the Land Rover business. Next, in 2000, Ford Motor Co. purchased Land Rover for $2.7 billion. In 2008, Ford, which was experiencing a sales slump due to the worldwide economic crisis, sold Land Rover, along with Jaguar, to Tata Motors of India for some $2.3 billion. Today, JLR is the crown jewel of the salt-to-software conglomerate.

That’s all from us this week. Watch this space for more. Read more at ndtvprofit.com/auto.

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