Ather Energy, an Indian electric scooter maker, is moving forward with plans for a Mumbai IPO that could raise about $400 million. The company aims to sell shares by the end of March or early April. Ather was initially targeting a valuation of about $2 billion from the IPO.
However, after nine straight years of gains, India’s benchmark Sensex has been sliding in recent months. It is down about 5% this year and 14% from a September peak. The deal will add to the $2.25 billion raised in Mumbai IPOs so far this year.
Considerations are ongoing and details such as the valuation, timing, and size could still change. The offering will comprise both primary and secondary shares, with founders Tarun Mehta and Swapnil Jain as well as existing investors, including National Investment and Infrastructure Fund Ltd. and Tiger Global Management’s Internet Fund III, offloading stakes.
Hero MotoCorp, Ather’s biggest shareholder with a stake of just over 37%, will not participate in the share sale. Founded in 2013, Ather was among India’s earliest electric two-wheeler startups. While initially positioned as a premium player, the company has sought to expand its market share in the face of growing competition from legacy manufacturers Bajaj Auto Ltd.
and TVS Motor Co., as well as Ola Electric Mobility Ltd. The IPO comes amid cooling demand for electric scooters in India. Sales of two-wheelers in February declined 8% from a year earlier to 76,086 units, data from the Federation of Automobile Dealers’ Association show.
Last year, Ather’s sales grew 20%, while Ola’s rose 52%. The share sale would be the second by an Indian pure-play electric vehicle maker. Ola, backed by Japan’s Softbank Group Corp., made its market debut last year.
Ola’s shares have tumbled as much as 65% from a peak in August when the company’s market value reached $7.7 billion. Ola was trading at a record low on Tuesday with a market value of about $2.6 billion. Ather Energy CEO Tarun Mehta dismissed concerns over the company’s valuation cut ahead of its planned IPO, emphasizing that customers buy its electric two-wheelers for quality and service rather than as a commodity.
“I think the job of the company is not to try and time the market. We’ve got a good business; we are hopefully scaling it up well. Beyond that, markets obviously always decide.
But I am not a big fan of trying to time too much.
Ather’s approach to Mumbai IPO
Other industry peers, competitors, have multiple approaches and I think our approach is quite unique,” Mehta told reporters.
Mehta said he is confident of his “product, tech and quality-focused brand”. “We believe that is central to building a long-term enduring auto company in India. Consumers don’t buy commodities here.
Consumers put a lot of trust in the auto brand they are buying. There is an enormous power of word of mouth and all that comes down to the quality a product has,” he said. He added, “The reliability is seen and how good, how happy the customers are.
So, between the twin intersections of the product experience, which is where the magic lies, and quality, which is what will hopefully ensure good word of mouth, there always has been a focus.”
He emphasized the Ather stack strategy of building the entire ecosystem of hardware, product, largest charging network, and software for a good customer experience. Ather scooters have features such as auto hold and magic twist, he said. Overall, the Indian electric two-wheeler market has seen significant shifts in recent months, with traditional manufacturers Bajaj Auto and TVS Motor making notable gains in market share.
In December 2024, Bajaj Auto led the market with a nearly 25% share, selling 18,276 units, while TVS Motor secured a 23.48% share with 17,212 units sold. Listed rival, Ola Electric, previously the market leader, saw its share decline to 18.78% during the same period, with sales of 13,769 units. Ather is currently focused on building the largest network for open-source fast charging.
Mehta shared that Ather has about 3,000-3,500 fast chargers on its network across the country. It had doubled from 1,000-1500 fast chargers until last year, and the company plans to announce its next expansion in a few months. “For us, the first priority still is a widespread network of fast and ultra-fast chargers with very high uptimes.
And towards that, we need to try more industry collaboration, which is why we open-sourced a standard. The Ather standard is not even called the Ather standard, it’s called LECCS, Light Electric Combined Charging System, and BIS (Bureau of Indian Standards) has accepted it now,” Mehta said. He added that multiple OEMs have now adopted this standard, and Ather doesn’t plan to charge any installation or onboarding fee for the same.
“It’s stupid for us to say, no, we will sell our charging standard. We’ll put a royalty curtain behind it. No one will pay for it.
Everybody will set up 10 different charging infrastructures. So, I think it’s far better to just dissolve those barriers and make it easy for people to stop wasting time,” he said. The Indian electric vehicle market is rapidly evolving, and Ather Energy appears to be steadfast in its commitment to enhancing consumer trust through quality and service.
As the company prepares for its IPO, this focus on long-term value and customer experience will be closely watched by market participants.
Photo by; Matthew Henry on Unsplash
