Ather Reduces Its IPO Valuation, Gross Margin Doubled In FY 25

As per the latest red herring prospectus, Ather Energy is gearing up to raise ₹2,626 crore through a fresh issue of shares from its upcoming IPO. This is official second revision that the Bengaluru-based EV manufacturer has shared with market regulator SEBI which we had reported earlier. The above is a 15 per cent reduction from the red herring prospectus (RHP) it had filed in September, 2024.

Unlike before, Ather now plans to offer up 1.1 crore equity shares through OFS (Offer For Sale), which is down from 2.2 crore equity share. While Ather’s founders Tarun Mehta and Swapnil Jain have already reduced its OFS contribution to 9.8 lakh shares from 10 lakh shares earlier. Investors like Caladium Investment, NIIF II, and Internet Fund III, as well as IIT Madras incubation bodies are also scaling back their OFS. As per the latest RHP, ₹400 crore from the fresh issue will be used primarily for R&D initiatives, ₹585 crore will be used to expand manufacturing facilities, ₹530 crore will go into expand its retail network, and repayment of certain borrowed money will cost ₹800 crore. 

Ather is taking the conservative route in the run-up to its IPO due to the current volatile situation of the market. The Indian equity market has shown a mixed appetite for tech-first or capital intensive ventures. This downscaling aligns with the prevailing expectation among investors for profitability and capital efficiency. 

Reportedly, Ather Energy is also targeting a pre-money valuation of ₹9,000-₹10,000 crore, post-which it expects the valuation to cross the ₹12,000 crore mark. This further marks a ₹2,000 crore reduction in the company value which it had earlier predicted would reach ₹14,000 crore. 

(Also Read: Ather Energy Partners With CBAK Energy For LFP Batteries)

While reports also state that Ather Energy has reduced the size of its IPO due to existing investors offloading fewer shares. The brand reported that its losses have reduced and gross margin has improved year-on-year during the first nine months of FY 25 that ended in December 2024. 

While this improvement in financial performance has largely been due to the Ather Rizta, which now accounts for 40 per cent of the company’s total sales. Due to which, Ather’s revenue operation has also increased from ₹1,230 crores to ₹1,579 crore year-on-year from the first nine months of FY 24 to FY 25. 

Ather is the second homegrown brand after Ola Electric to go public. Just like the latter, even Ather is planning to invest the money raised from this IPO to launch new products like electric motorcycles.