Ather IPO Delivers Big Wins for Early Investors Despite Soft Market Debut

Ather Energy, an electric two-wheeler company with considerable backing from investors, made its public market entry on Indian stock exchanges this week with an underwhelming response. The company’s IPO, available from April 28 to April 30, had set an offer amount of INR 2,981 crore, of which it had collected INR 1,340 crore from anchor investors just ahead of its opening. Despite some apparent early enthusiasm from investors, the company’s shares opened and then closed below their debut price.

The company's early financial backers tell a different tale through the numbers, even with the muted listing. Ather's promoters and major shareholders, together with their combined stake, saw the value of their investments more than double, to INR 7,055.65 crore, as calculated from the red herring prospectus. They held INR 7,055.65 crore of Ather's total value at the time of its initial public offering, more than double what they had invested early on.

Flipkart Founders’ Early Investment Pays Off

The major beneficiaries here are Flipkart co-founders Binny Bansal and Sachin Bansal, who, in 2014, invested 3.1 crore each in Ather. While Sachin exited by selling his stake to Hero MotoCorp and the Kamath brothers of Zerodha, missing out on potential gains of up to 20%, Binny is still in. His original stake has grown to 92 crore, which is a bit hard to grasp even for us. But, it is the kind of unvarnished truth that highlights patience as a virtue in the high-growth electric vehicle sector.

Ather's list of shareholders showcases some very prominent names like Tiger Global, NIIF, GIC, Hero MotoCorp, and IIT Madras. They together hold close to 62% of the company. And it’s a who’s who in the institutional investment circle with our backers. Hero MotoCorp, which owns 30.9% of Ather, chose not to offload any shares during the IPO, maintaining a significant foothold in the business.

Strategic Share Sales and Employee Windfall

Although the IPO yielded few exits, some significant deals occurred. Promoters and important shareholders sold 1.1 lakh shares through an offer for sale (OFS), generating INR 354.76 crore. Investor Amit Bhatia completely exited, selling his shares for INR 59.48 lakh. Tiger Global, NIIF, and GIC's current stakes stand at INR 585.66 crore, INR 537.76 crore, and INR 1,225.45 crore respectively, reflecting a healthy uptick in value.

The success at Ather has also benefited its employees. Over 1,300 staff members participate in the company’s ESOP (employee stock ownership plan) program, which is set to expire in 2024. Under this program, the 1,65,00,000 shares owned by Ather's staff have seen their value skyrocket to around INR 500 crore.