Bengaluru-based electric two-wheeler manufacturer Ather Energy has set a price band of Rs 304-Rs 321 for its initial public offering comprising a fresh issue of Rs 2,626 crore and an offer for sale of up to 11 million shares. At the upper end of the price band, the IPO size will be able to raise Rs 2,981 crore, and the company’s overall valuation will be almost Rs 12,000 crore.
The company also clarified that the issue had been downsized as investors see more growth potential in the company. This will be the second electric two-wheeler company looking to go public after Ola Electric Mobility’s IPO of Rs 6,145 crore in August last year.
Tarun Mehta, CEO, Ather Energy said that the company’s volumes have grown in a very healthy way in FY25 due to stable subsidies and government policies. “Total income has also grown in these three quarters and the biggest story is coming in adjusted gross margins, which have almost doubled from 9% to 19%,” he said.
The offer open for subscription to retail investors from April 28 to on April 30 will be the first since February as many companies had delayed their listing plan amid the market correction.
In the Red Herring Prospectus (RHP), the offer for sale component has been halved to 11 million from 22 million shares in the draft prospectus it filed in September last year.
Ashish Nigam, MD of investment banking at Axis Capital said, “From the time we filed DRHP to now, many months have passed, in those months the business has done really well.” He also added that the predominant part of the downsizing has actually been a cut in the offer for sale as selling shareholders saw the potential of growth that is coming.
Mehta, who will sell 9.8 lakh shares in the offer, said that the portfolios of the industry will expand a lot in the coming years, the real addressable market and distribution will continue to expand and while there are industry barriers around battery range, charging time, battery life, he is confident that with these being addressed, the company’s will maintain its growth targets.
Mehta also said that the company doesn’t want to lock itself in high capital expenditure in a rapidly changing industry. “We believe that the suppliers are better positioned to handle that kind of volatility, our capital is best used for product development, tech development, and brand building,” he said.
He added that the company has not really focused a lot on vertical integration in the manufacturing except battery in which it has a very strong IP. “ We said we are not going to do any other vertical integration as far as manufacturing goes because it takes away some of the flexibility in the early stages,” he said.
The company plans to use the net proceeds of the issue to finance the Phase 1 of setting up E2W Factory 3.0 in Sambhajinagar, Maharashtra, repayment/ prepayment, in full or part, of certain borrowings, investment in research and development, expenditure towards marketing initiatives, and general corporate purposes