Electric scooter maker Ather Energy eyes IPO in Mumbai with $1.2 billion valuation as demand for two-wheelers slows in India.
Indian electric scooter maker Ather Energy is expected to launch its IPO in Mumbai, with a valuation of nearly $1.2 billion. (Pricing details will be updated if necessary.) Initially, the company was aiming for a roughly $2 billion valuation, but it has been forced to lower its target amid market PCARs. Both primary and secondary shares could be offered, and the IPO could raise as much as $400 million. The timing and details of the IPO, including its size, are still being discussed, and changes are possible.
Market Challenges
The IPO comes as India’s electric vehicle (EV) market is contending with challenges. According to a report from the Federation of Automobile Dealers’ Association (FADA), two-wheeler figures saw an 8% decrease with 76,086 cars sold in February. Ather’s sales grew by 20% in the previous year, however, they are trailing their competitor, Ola, whose sales grew by 52% YoY. Ather’s slower growth than its rivals raises questions about its future potential.
Investor Shares
The IPO will consist of both primary and secondary shares. Ather will bring in new capital and current investors will be exiting a part of their stake. Some of the large investors such as Tiger Global Management’s Internet Fund III and the National Investment and Infrastructure Fund (NIIF) will be offloading shares. Hero MotoCorp, which owns a little over 37% of Ather, will not be earmarking any of its shares for this offering. This could indicate faith in Ather’s long-term growth prospects.
Ola’s Decline
Ather’s IPO also comes amid some troubles for Ola Electric, another big player in the Indian EV segment. Ola’s stock price has fallen sharply by 65% from a market cap of $7.7 billion last August. Ola is valued at about $2.6 billion today. Such a huge decline in Ola’s stock could affect investor sentiment and could make fundraising in the IPO harder for Ather.
Electric Future
Ather Energy, however, is hopeful despite the odds. Since that time, the company has laid the groundwork for building its brand and extending its product offering. Ather is also working on expanding production as well as developing the charging infrastructure for the electric scooters. The IPO is viewed as a significant milestone, as the company’s ambitions to position itself as a leading player in the electric vehicle industry are well known.
Market Outlook
This IPO of Ather is expected to be a vital test of the prospects of all electric vehicle manufacturers in India. If all goes well, it will also lead more firms to float, giving the EV sector a fillip. However Ather needs to adapt quickly to slow market growth and competition from companies like Ola. Analysts predict that, depending on how the IPO performs, it may help investors better understand the future of India’s electric vehicle market.
The IPO from Ather Energy is a significant event for the electric vehicle sector in India. The firm is seeking a new cash injection to fuel its growth with an estimated valuation standing at $1.2 billion. But the IPO comes amid a contracting EV market and a broader market decline, raising questions around investor appetite for the new offering. The success or failure of Ather’s IPO will shed some light on just how bright the future of the EV market in India will be.
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