Ather Energy gets SEBI's go-ahead for IPO

Electric scooter startup Ather Energy has received market regulator Securities and Exchange Board of India’s (SEBI) go-ahead to raise funds through an initial public offering (IPO), an update with the capital markets regulator showed.

The proposed IPO of the Bengaluru-headquartered pure play EV company is a combination of a fresh issue of equity shares aggregating up to ₹3,100 crore and an offer for sale (OFS) of up to 2.2 crore equity shares by the selling shareholders, according to the draft red herring prospectus (DRHP).

Ather Energy is India's fourth-largest electric scooter maker in terms of volumes. The automaker sold around 1.26 lakh EVs in 2024.

The selling shareholders include, promoter selling shareholders Tarun Mehta and Swapnil Jain, each offering up to 1,000,000 equity shares. Among the corporate selling shareholders, Caladium Investment Pte Ltd will sell up to 10,520,000 equity shares, National Investment and Infrastructure Fund II up to 4,616,519 equity shares, Internet Fund III Pte. Ltd. up to 4,000,000 equity shares, 3State Ventures Pte. Ltd. up to 480,000 equity shares, IITM Incubation Cell up to 310,495 equity shares, and IITMS Rural Technology and Business Incubator up to 41,910 equity shares. Additionally, individual selling shareholders Amit Bhatia and Karandeep Singh will offer up to 18,531 equity shares and 13,311 equity shares, respectively.

As per the DRHP, the company proposes to utilise the net proceeds of the fresh issue towards funding of capital expenditure requirements for establishment of an electric two-wheeler factory in Maharashtra for ₹927.2 crore; investment in research and development worth ₹750 crore; repayment or pre-payment, in full or part, of certain borrowings availed by the company (₹378.2 crore); expenditure towards marketing initiatives (₹300 crore); and general corporate purposes.

Ather Energy, which filed preliminary IPO papers with SEBI in September, obtained its observation on December 23, the SEBI update showed. In SEBI's parlance, obtaining observations implies its approval to float the IPO.

Established in 2013, Ather Energy designs and develops electric two-wheelers, battery packs, charging infrastructure, associated software and accessories as well as manufactures battery packs and assembles E2Ws in-house. In fiscal year 2024, Ather Energy sold 109,577 E2Ws and was the third largest player by volume of E2W sales, as per CRISIL.

The company’s current E2W portfolio comprises two product lines – the Ather 450 line, which caters to customers seeking performance scooters, and the Ather Rizta line, which is targeted at customers seeking convenience scooters for their family.

Axis Capital, HSBC Securities and Capital Markets (India) Pvt Ltd, JM Financial and Nomura Financial Advisory Securities (India) Pvt Ltd are the book-running lead managers to the issue. The equity shares are proposed to be listed on BSE and NSE.