Bengaluru-based e-scooter maker Ather files for Rs 3,100 crore IPO

The proposed IPO is a combination of a fresh issue of equity shares worth Rs 3,100 crore and an Offer For Sale (OFS) of 2.2 crore equity shares by promoters and investors shareholders, according to the Draft Red Herring Prospectus (DRHP).

Bengaluru: Bengaluru’s electric scooter maker Ather Energy has iled a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on Monday to raise Rs 3,100 crore through a fresh issue of shares and an offer for sale (OFS) of 2.2 crore equity shares.

According to the document, the funds will go towards part funding the Rs 1,122.7-crore first phase of a new plant being constructed at Aurangabad Industrial City, repaying debt of Rs 300 crore, research and development investment of Rs 750 crore and marketing costs of Rs 300 crore.

The company expects the new plant with an annual installed capacity for making  5 lakh electric two wheelers to commence production in May 2026, in a phased manner and go steam by March 2027. On completion of the two phases the plant will have a capacity to make 10 lakh vehicles annually.

Interestingly, even as it has embarked on a new plant, the company revealed in its filing that its Hosur plant is seeing a capacity utilisation of just 29% in both its electric two-wheeler and battery pack manufacturing lines. "Our Hosur Factory had a total installed capacity of 420,000 units for E2W assembly per annum and  379,800 for battery pack manufacturing per annum in Fiscal Year 2024. Our battery pack manufacturing  capacity is being expanded to manufacture 531,120 units per year. We may not be able to fully utilise  such capacity if demand for our E2Ws does not meet our expectations," it declared ominously.

Also on its expansion plans, the company said,  ''We announced our plans to enter into the Sri Lankan market and other international markets. Heightened geo-political and economic tensions may affect our ability to expand outside of India, which may also be affected by protectionist policies from the government of the target market." Last year, it opened a dealer outlet  in Nepal. 

In the last fiscal the company sold 109,577 E2Ws (including exports to Nepal), up from 92,093 units in FY23; 23,402 units in FY22 respectively, as per the DRHP. Its revenue from operations in FY24 stood at Rs 1,753.8 crore, slipping from Rs 1,780.9 crore in FY23. Its net loss widened to Rs 1,059.7 crore in the last fiscal from Rs 864.5 crore in FY23.

The OFS component will see promoters Tarun Mehta and Swapnil Jain sell 10 lakh equity share each. The duo presently hold 6.63% stake in the company presently. However, the bigger stakeholder Hero MotoCorp Ltd with 37.20% holding will not be shedding any shares.

This is  the second electric two-wheeler company  to go public after Ola Electric  floated its Rs 6,145-crore IPO in August.