Indian electric scooter manufacturer Ather Energy plans to raise about $370 million by issuing fresh shares in an initial public offering, according to its draft prospectus filed on Monday (PDF), as the startup seeks to capitalize on growing demand for electric vehicles in the world’s third-largest auto market.
The Bengaluru-based lossmaking startup, which competes with recently listed rival Ola Electric, said it will also sell up to 22 million shares from existing investors in the IPO. The firm is targeting a valuation of $1.5 billion to $2 billion, according to people familiar with the matter. Ather Energy declined to comment.
The startup, backed by India’s Hero MotoCorp and sovereign wealth fund National Investment and Infrastructure Fund, said it will use the proceeds to fund a new manufacturing facility in Maharashtra state, repay borrowings and invest in research and development.
Ather Energy commanded about 19% of the electric two-wheeler market as of August-end, according to official government data. Ola Electric leads the market with a 31% share, whereas TVS Motor and Bajaj Auto hold 20% and 19% market share, respectively. Hero has about 5% of the market share.
Traditional giants are increasingly ramping up their focus on the EV market — and delivering results. Bajaj Auto’s market share stood at 11% at the end of June this year, for instance, when Ola Electric had about 46% of the market.
Ather’s IPO plans come as India’s electric vehicle market heats up, driven by government incentives and rising fuel prices. The country aims to have 30% of private cars and 70% of commercial vehicles running on electricity by 2030.
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather is known for its in-house design approach, with 80% of key components designed internally. Ather raised about $500 million across several rounds, according to Tracxn. The startup reported losing $126 million to generate a revenue of $213 million for the fiscal year ending March.
Ather faces stiff competition from well-funded startups and established automakers rushing to grab a slice of India’s rapidly growing electric two-wheeler market. Rival Ola Electric went public last month, while traditional players like Bajaj Auto and TVS Motor have also entered the electric scooter space.
Axis Capital, HSBC, JM Financial and Nomura are book-running lead managers for Ather’s IPO.
