Ather Energy Wants to Value its IPO at $2.4 billion

Nitin Konde, Varun Bhardwaj

Jan 13, 2025 — 3 min read

Ather Energy Targets $2.4 Billion Valuation for IPO

According to reports, Ather Energy, an electric car startup, is aiming for a $2.4 billion value for its impending initial public offering (IPO) this year. The new valuation is more than 80% higher than its previous round of fundraising, according to a media story that cited sources. The firm will submit its final clarifications to the Securities and Exchange Board of India (SEBI), the market watchdog, and submit its revised draft red herring prospectus (DRHP) by the end of January or the first few weeks of the subsequent month, according to the article.

How Company Plans to Utilise Funds?

Ather intended to use INR 750 Cr, or 25% of the fresh issue part of the INR 3,100 Cr IPO, for research and development (R&D) in accordance with its original DRHP, which was submitted in September. Additionally, INR 927 Cr will be set aside for the establishment of a new facility in Maharashtra. According to reports, the unicorn in e-mobility was aiming for an IPO price of about $2.5 billion. It should be noted that this development occurs weeks after SEBI approved Ather's plans to go public. According to the SEBI website, the markets regulator sent Ather the observation letter on December 23.

Recent Developments at Ather

Ather Energy, which was founded in 2013 by Tarun Mehta and Swapnil Jain, produces battery packs and electric two-wheelers in addition to having its own charging station. The company recently introduced the Rizta family escooter series and ventured into the smart helmet industry after expanding its market with its 450 line of ebikes. After raising INR 600 Cr from its current investor NIIF in August 2024 at a post-money valuation of $1.3 billion, the EV powerhouse became a unicorn. However, the slowdown in the number of EVs sold in the broader market impacted Ather Energy, which experienced a 19% drop in vehicle registrations to 10,429 last month from 12,909 in November.

Good News for Nikhil Kamath!

Nikhil Kamath, a well-known podcaster and cofounder of Zerodha, will also benefit from one of the fastest value increases due to IPO valuation, as his 5% ownership will increase to over $100 million in around six months.

By purchasing Flipkart cofounder Sachin Bansal's share last year, Kamath made his debut on the Ather cap table. At a value below the unicorn round, Kamath is thought to have paid about $40 million for the Ather stake.

With investments in a number of early-, late-, and IPO-bound firms, Kamath has become a prominent player in India's digital economy. Among the companies in his portfolio are Bluestone and Subko Coffee.

Hero MotoCorp, the biggest shareholder in Ather with roughly a 37% interest, will be listed as a co-promoter and will not be selling any shares during the offer-for-sale (OFS) window. Another Flipkart cofounder, Binny Bansal, is selling off a portion of his investment in the EV manufacturer as part of the IPO. Other stockholders include GIC and Tiger Global.