Ather Energy IPO: EV Maker Raises ₹1,340 Crore From Anchor Investors Ahead of ₹2,981 Crore Public Issue

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.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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Tesla Refunds Early India Reservations, Signals Imminent Market Entry

In a significant development for India's electric vehicle market, Tesla Inc. has begun refunding reservation fees to early Model 3 bookers in the country, strongly indicating that the American EV giant is preparing for its long-awaited entry into the world's third-largest automobile market.

Refund Notifications Signal Strategic Shift

Tesla's India office has started sending emails to customers who placed Model 3 reservations back in 2016, informing them of the company's decision to return their booking fees. These communications, sent from official Tesla domains and viewed by Bloomberg News, suggest a recalibration of the company's India strategy.

The emails state: "We would like to return your reservation fee for the time being. When we finalize our offerings in India, we will reach out in the market again. We hope to see you back with us once we are ready to launch and deliver in your country."

This move appears to be linked to Tesla's decision to discontinue the older generation of the Model 3, which was the vehicle originally reserved by these early adopters. However, industry observers view this as a clear indication that Tesla is preparing to introduce its newer models to the Indian market rather than abandoning it.

Elon Musk's India Visit and Trade Negotiations

Adding further weight to speculation about Tesla's imminent India entry, CEO Elon Musk recently announced on his social media platform X that he plans to visit India later this year. This timing is particularly noteworthy as it coincides with ongoing trade negotiations between India and the United States, which may include provisions to reduce tariffs on imported automobiles.

The high import duties on foreign vehicles have been a major sticking point for Tesla's India entry plans. For years, Musk has expressed concerns about India's substantial tariffs on imported cars, which have made it challenging for Tesla to offer its vehicles at competitive prices in the Indian market.

Changing Regulatory Landscape

A more favorable tariff structure resulting from the India-US trade negotiations could fundamentally reshape Tesla's approach to the Indian market. The potential reduction in import duties would allow Tesla to test the market with imported vehicles before committing to local manufacturing facilities.

This shift comes at a crucial time for Tesla, which experienced its first decline in worldwide vehicle deliveries in over a decade last year. Facing increasing competition from global rivals like BYD Co., Tesla appears eager to tap into India's growing market of affluent consumers with interest in premium electric vehicles.

Market Impact and Domestic Considerations

While the arrival of Tesla vehicles would undoubtedly please India's increasingly affluent upper-middle class, it presents a double-edged sword for the country's automotive industry. The entry of a prestigious global EV manufacturer could accelerate the adoption of electric mobility in India, supporting the government's clean energy objectives.

However, there are concerns that imported Tesla vehicles might pose challenges for domestic automakers who have invested significantly in manufacturing facilities that employ thousands of workers across the country. The government will need to balance these competing interests as it considers any adjustments to its import duty structure.

What This Means for Potential Tesla Customers

For Indian consumers who have been eagerly waiting for Tesla vehicles, these developments suggest that the wait may soon be over. While early Model 3 reservations are being refunded, Tesla's message clearly indicates an intention to return to the market with a refreshed product lineup.

The company's outreach to early reservation holders suggests that Tesla wants to maintain goodwill with its potential Indian customer base while it finalizes its market entry strategy. Prospective buyers should monitor Tesla's communications for announcements about new reservation opportunities as the company solidifies its India plans.

As Tesla continues to navigate the complex regulatory and market dynamics in India, these recent moves indicate that Elon Musk's company is more serious than ever about establishing a presence in one of the world's most promising automotive markets.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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