Ather Energy IPO: Hero MotoCorp-Backed EV Maker Secures ₹1,340 Crore From Anchor Investors
Electric two-wheeler manufacturer Ather Energy Ltd has successfully raised ₹1,340 crore from anchor investors ahead of its initial public offering (IPO), marking a significant milestone for the Hero MotoCorp-backed company as it prepares to launch the first mainboard public issue of the 2025-26 financial year.
Strong Anchor Investor Interest
On Friday, April 25, Ather Energy announced it had allocated 4.17 crore shares to 36 funds at ₹321 per share, which represents the upper end of the IPO price band. This pre-IPO fundraising demonstrates robust institutional investor confidence in the electric vehicle manufacturer's growth prospects.
The anchor book features an impressive lineup of global and domestic investors, including:
- International financial institutions: Custody Bank of Japan, Franklin Templeton, Abu Dhabi Investment Authority, Eastspring Investments, Morgan Stanley Investment Management, and Societe Generale
- Domestic mutual funds: PSBI Mutual Fund, Aditya Birla Sun Life MF, ICICI Prudential MF, Invesco MF, ITI MF, and Union MF
- Insurance companies: Aditya Birla Sun Life Insurance
IPO Structure and Valuation
The upcoming public issue, valued at ₹2,981 crore, comprises a fresh issue of equity shares worth ₹2,626 crore and an offer-for-sale (OFS) of 1.1 crore equity shares by existing shareholders. The IPO price band has been set between ₹304 and ₹321 per share.
At the upper price band, Ather Energy's overall valuation is pegged at ₹11,956 crore, positioning it as a significant player in India's rapidly expanding electric vehicle market. The public subscription period will run from April 28 to April 30, 2025, with equity shares expected to list on stock exchanges by May 6, 2025.
Fund Utilization Plans
Ather Energy has outlined clear objectives for utilizing the IPO proceeds, focusing on expansion and financial stability:
- Establishing a new electric two-wheeler manufacturing facility in Maharashtra
- Reducing existing debt to strengthen the company's balance sheet
- Supporting ongoing research and development initiatives
The company recently announced the expansion of its R&D and testing capabilities at its product testing & validation center, underscoring its commitment to innovation in the electric mobility sector.
IPO Reservation Structure
The electric two-wheeler manufacturer has structured its offering to ensure broad market participation:
- 75% of the issue reserved for qualified institutional buyers (QIBs)
- 15% of the issue allocated for non-institutional investors
- 10% of the issue set aside for retail investors
Second Major E2W IPO
Ather Energy's public offering follows Ola Electric Mobility's ₹6,145-crore IPO in August 2024, making it the second major electric two-wheeler company to seek public listing in India. Ola Electric's offering had included a fresh issue of up to ₹5,500 crore and an OFS of up to 8.5 crore equity shares.
This trend highlights the growing investor interest in India's electric vehicle sector, which has seen significant expansion amid government incentives, rising fuel costs, and increasing environmental consciousness among consumers.
Corporate Backing
As a company backed by automotive giant Hero MotoCorp and global investment firm Tiger Global, Ather Energy brings substantial industry expertise and financial support to its public offering. This backing has helped the company develop its manufacturing capabilities and distribution network across India.
IPO Management
The book-running lead managers for Ather Energy's IPO include Axis Capital, JM Financial, Nomura Financial Advisory and Securities (India), and HSBC Securities & Capital Markets. These financial institutions will oversee the public offering process and coordinate with investors and regulatory authorities.
As India's electric vehicle market continues to evolve rapidly, Ather Energy's IPO represents a significant opportunity for investors to participate in the country's green mobility transition. The company's focus on premium electric two-wheelers has positioned it as a notable player in a segment with substantial growth potential.
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