Ather Energy Eyes IPO, Listing By Mid-April At Existing Valuation Of Rs 14,000 Crore

Ather Energy Ltd. is eyeing an initial public offering and listing by mid-April at the existing post-money valuation of Rs 14,000 crore or about $1.6 billion, people aware of the matter said on Tuesday.

The updated draft red-herring prospectus will be filed by next week. The red herring prospectus will come seven days after that, one of the people said on the condition of anonymity. The size of the IPO is not known yet.

Queries emailed to Ather Energy remained unanswered as of publishing this story.

The Ather Energy IPO, approved by India's market regulator late last year, includes a fresh issue of shares worth Rs 3,100 crore and an offer for sale of 2.2 crore shares by founders Tarun Mehta and Swapnil Jain, and a clutch of existing investors. Hero MotoCorp., India's biggest two-wheeler maker and the largest shareholder in Ather Energy, is not offloading any of its 37.5% stake.

The IPO proceeds will be used to set up a new manufacturing plant in Maharashtra, for research and development and to service debt, according to the DRHP.

Axis Capital Ltd., HSBC Securities and Capital Markets India Pvt., JM Financial Ltd., and Nomura Financial Advisory and Securities India Pvt. are the book-running managers.

Valuation Question

Ather Energy's IPO has been long overdue. The 450 X maker first filed its IPO papers in September last year, following a funding round in August that pegged its valuation at $1.3 billion. At that time, NDTV Profit, on the basis of its own calculations, valued the company at $1.12 billion.

But a lot has changed since then, in terms of sales and market share.

Ather Energy's sales have risen by more than a fourth year-on-year to 1.15 lakh units in the 11 months ended February, according to Vahan data. A noticeable uptick was seen after deliveries of the Rizta family scooter commenced in the second half of the fiscal. That, according to the people cited above, has allowed for a valuation bump in the IPO.

Founded in 2013 by IIT Madras batchmates Mehta and Jain, Ather Energy took five years to launch its first scooter in 2018. A second mass-market offering came only last year. The IPO comes with an equally measured approach, Jain told NDTV Profit in Bengaluru last month.   

"I think we are in a sort of place where we want to take this (Ather Energy) to the public, and that we are going to," he said. "This (the IPO) isn't for funding, that you can do privately as well... This is about taking this company to the people after its products."