Ather Energy IPO opens on April 28: Check financials, business model, strength and risks

Ather Energy, a pure-play electric vehicle (EV) company, is set to launch its IPO on April 28, 2025. This will be first mainboard since Feburary 14. Last mainboard issue was Quality Power Electrical Equipments. Consistent market correction has led to slowdown in new IPOs.

Incorporated in 2013, Ather Energy is a pure-play electric vehicle (EV) company that designs and develops electric two-wheelers (E2Ws), battery packs, charging infrastructure, associated software, and accessories.

Ather Energy business update

The company positions itself as a premium e-scooter manufacturer as its products come at a premium price. Ather Energy sold 109,577 E2Ws in FY24 and 107,983 units till Q3FY25, making it the fourth largest player in India by volume after Ola Electric Mobility, TVS Motor, and Bajaj Auto. The company had a market share of 10.7% for the nine months ended December 31, 2024.

Ather Energy manufacturing facility

Ather has an E2W assembly and battery pack manufacturing factory near Hosur, Tamil Nadu, with an annual installed capacity of 4.2 lakh units for E2Ws and 3.8 lakh units for battery packs. The company had 230 suppliers as of March 31, 2024, and procures 99% of its E2W components domestically, excluding lithium-ion cells.

Furthermore, the company plans to set up a new factory in Chhatrapati Sambhajinagar, Maharashtra, expanding its total installed production capacity to 1.42 million E2Ws after phase 2 completion.

The company follows an asset-light distribution model wherein experience and service centres are operated by third-party retail partners. As of December 31, 2024, Ather Energy has 265 experience centres and 233 service centres in India. The company also has operations in Nepal and Sri Lanka.

Ather Energy IPO consists of a fresh issue of equity shares worth up to ₹2,626 crore and an offer for sale of 1.1 crore shares by existing shareholders worth ₹354.7. The total issue size of the IPO is ₹2,980.7 crore. Its shares will be listed on the NSE and BSE.

Ather Energy IPO Price band and lot size

Ather Energy IPO price band has been set between ₹304 to ₹321 per share, while the lot size for an application is 46 shares. Minimum investment required by the retail investors is ₹14,766 at the upper end of the price band.

Financial snapshot

Ather Energy IPO Strengths

• The company had a market share of 10.7% for the nine months ended December 31, 2024.
• India’s 2w (two-wheeler) market is expected to grow at a CAGR of 7-8% between FY24 and FY31 to reach a market size of up to 3 crore.
• This growing demand and consumer preference for electric vehicles offer good opportunities for companies like Ather Energy to expand their business and gain market share.
• Its vertically integrated approach gives it control over the design of E2W key components and accessories.

Ather Energy IPO key risks

• Since its incorporation, Ather has incurred negative cash flow from operations and reported losses, with its net loss widening from ₹344.1 crore in FY22 to ₹1,059.7 crore in FY24.
• Its future growth depends on the demand and adoption of E2W. If the market doesn’t develop as expected, the company’s business will be affected.
• The company relies on some key suppliers for its EV components. Hence, any loss of key suppliers or refusal by them to supply such components could impact the business.