Ather Cuts IPO Size, Offer Opens on Monday

Electric two-wheeler manufacturer Ather Energy has reduced the size of its upcoming initial public offering, according to the draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI).

The Bengaluru-based automaker is looking to raise Rs 2,626 crore from the fresh issue, down from its earlier target of Rs 3,100 crore. The offer for sale (OFS) has also been significantly reduced, with the total number of equity shares on offer through OFS halved to 1.10 crore, from the initially proposed 2.20 crore shares.

Caladium Investments Pte Ltd, National Investment and Infrastructure Fund II, Internet Fund III Pte Ltd, and cofounders Tarun Mehta and Swapnil Jain are among the investors who will offload their shares via OFS. Hero MotoCorp Ltd–which is the largest shareholder in Ather with a 38.19% stake–is not selling any shares in the issue.

Ather did not disclose a specific reason for downsizing its IPO. However, the move comes amid heightened volatility in global markets and weakening consumption trends in India, which have led to broader uncertainty in domestic equities. Investor sentiment has also been mixed toward capital-intensive businesses, prompting several issuers to recalibrate their public offering plans in line with market expectations around profitability and capital efficiency.

Ather’s IPO will open for subscription on April 28 and close on April 30, with anchor bidding scheduled for April 25. The company’s equity shares are proposed to be listed on both BSE and NSE, with NSE designated as the lead exchange.

Of the funds raised from the fresh issue of shares, Ather plans to use Rs 927.2 crore for capital expenditure of its upcoming facility in Aurangabad (Maharashtra). The company also plans to invest Rs 750 crore in research and development, and spend Rs 300 crore on marketing activities and Rs 40 crore for repayment of debt.

The electric two-wheeler maker expects to start production at the Aurangabad facility–which will be its third manufacturing unit–in a phased manner from July 2026. The new facility will manufacture both electric two-wheelers and battery packs. Currently, Ather has two manufacturing facilities in Tamil Nadu, one dedicated to battery production and the other for vehicle assembly.

“At the Hosur Factory (in Tamil Nadu), we had a total annual installed capacity of 420,000 units for E2Ws and 379,800 units for battery packs as of December 31, 2024. We are in the process of building the first phase of our Factory 3.0 in Chhatrapati Sambhajinagar (formerly Aurangabad), Maharashtra, India to expand our total installed production capacity to 1.42 million E2Ws upon completion of phase two,” the company said.

Ather currently offers two electric scooter models – Ather 450 and Ather Rizta with a total of seven variants on a single platform. It is also developing a motorcycle platform named Zenith and a new scooter platform named EL.

During the financial year 2024, Ather Energy sold a total of 1.10 lakh electric two-wheelers, up from 92,093 units sold in the financial year 2023. For FY24, the company reported a revenue of Rs 1,753.8 crore, down 2% on year. Of the topline, 90% came from vehicle sales and the rest from non-vehicle business. The company also reported a net loss of Rs 1,059.7 crore in FY24, compared to a loss of Rs 864.5 crore in FY23.

Axis Capital, HSBC Securities and Capital Markets (India), JM Financial, Nomura Financial Advisory and Securities (India) are booking running lead managers for the issue.