Howzz the Josh! Ather Energy IPO sees $2.4 billion valuation
Ather Energy IPO: Electric two-wheeler manufacturer Ather Energy is set to value itself at as much as $2.4 billion in its upcoming initial public offering (IPO), people briefed on the matter said. That’s a premium of more than 80% over the last funding round in August, when it turned unicorn, they said.
Ather is expected to file its updated draft red herring prospectus (DRHP) later this month or the first week of February after sending final clarifications to the Securities and Exchange Board of India (Sebi), said the people.
In contrast to the series of new-age businesses’ listings last year that took a cautious approach to valuation, the likes of Ather and Bluestone are likely to price their offerings at a premium, reflecting their own plans as well as the competitive landscape.
“Ather will seek a valuation of $2.2-2.4 billion, according to current conversations,” said a person aware of the matter. Ather’s Rs 3,100 crore ($360 million) proposal, the second electric vehicle (EV) startup IPO in the country after Ola Electric’s, has been cleared by Sebi. “Some minor updates are to be given; work is closing and (they) should be submitted soon,” the person said.
The company didn’t respond to queries.
Ather turned a unicorn at $1.3 billion valuation, following $71 million from existing investor National Investment and Infrastructure Fund (NIIF), ET was first to report on August 13.
What the IPO valuation also means is that Nikhil Kamath, Zerodha cofounder and a popular podcaster, will see one of the fastest value gains — in about six months — for his 5% stake to over $100 million.
He joined the Ather cap table last year by purchasing Flipkart co-founder Sachin Bansal’s shares. Kamath is believed to have invested approximately $40 million in Ather, at a valuation lower than the unicorn round. “He has already seen significant gains,” said a source familiar with the deal.
Kamath has become an active investor in India’s internet economy, holding stakes in various early-stage, late-stage, and IPO-bound startups. Subko Coffee and Bluestone are among the companies in his portfolio.
Hero MotoCorp, the largest investor in Ather with a 37% stake, will not be selling any shares in the offer-for-sale (OFS) window and will be considered a co-promoter. Binny Bansal, another co-founder of Flipkart, is also an investor in the EV maker and will be selling part of his stake in the IPO. Tiger Global and GIC are other shareholders.
Ather’s recent launches, such as Rizta, have significantly increased its overall sales, particularly in the northern and western regions. According to data from Vahan, the company’s market share has grown from around 6% in April to just over 14% by the end of 2024. As of January, it has reached approximately 16% market share.
On the other hand, Ola Electric has experienced a decline in its market share, especially in December when it lost its leading position to traditional automakers offering EVs, such as Bajaj Auto and TVS Motor. Last month, Ola Electric’s market share dropped below 20% for the first time, after holding nearly 50% in May.
Rizta is Ather’s first scooter designed for the family segment, which has been dominated by Ola Electric. The company’s Aurangabad plant will be utilized for manufacturing this model. Ather’s flagship 450 series caters to the performance scooter segment.
“In Gujarat, Ather’s market share surged to 25% in December from 5% in July, establishing itself as one of the fastest-growing markets for the company. A source familiar with Ather’s strategies revealed that the company is expanding its experience centers, enhancing charging infrastructure, and introducing Gold Service centers for maintenance.
Additionally, Ather has formed a partnership with Amara Raja, a battery and charging solutions company, for its new manufacturing unit in Aurangabad.
In 2024, nine Indian startups went public, and this year, the industry anticipates double that number to enter the public markets. A venture investor knowledgeable about the situation noted that many mid-stage startups are turning to IPOs as a viable alternative to seeking additional private funding.
Despite its impressive initial public offering, Ola Electric is currently trading below its issue price due to various factors. The stock closed at Rs 73.42 on the BSE last Friday.”
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.