Ather Energy IPO is all set to be one of the most anticipated listings in India’s EV space. With its focus on tech, premium electric scooters, and a growing charging network, Ather is looking to capitalize on the growing demand for sustainable mobility. Here’s a deep dive into its financials, risks, and long-term growth prospects.
Table of Contents
#1 Ather Energy IPO: Business Overview
Ather Energy is a leader in India’s electric two-wheeler (E2W) space, known for its pioneering approach to electric mobility. With Hero MotoCorp holding a 32% stake and over USD 160 million raised, Ather has positioned itself as a premium EV scooter manufacturer. Founded in 2013 by Tarun Mehta and Swapnil Jain, the company designs and develops E2Ws, battery packs, charging infrastructure, software, and accessories, so it has complete control over quality and innovation.
As a pure-play EV company, Ather builds its products from the ground up in India, reaffirming its commitment to local innovation and sustainability. In FY24, it sold 1,09,577 E2Ws, making it India’s 3rd largest E2W player by volume. Ather’s complete product ecosystem includes the Atherstack software suite (with 64 features) and Ather Grid’s fast charging network, further cementing its position in the premium EV space.
#2 Ather Energy IPO: Industry Overview
The Indian electric two-wheeler market is growing fast. In FY 2023, 8,40,000 electric two-wheelers were sold, a 33% year-on-year growth. By FY 2024, E2W penetration was 5.1%, with projections of 35-40% by FY 2031. The growth is primarily driven by rising fuel costs, government incentives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, and increasing environmental awareness.
Ather Energy is expanding beyond India, exporting to Nepal and exploring Southeast Asian markets like Indonesia, Thailand, and Vietnam where E2W adoption is high. It’s also looking at European expansion targeting eco conscious consumers. This global push aims to diversify revenue, reduce reliance on Indian policies, and strengthen Ather’s international brand presence.
#3 Ather Manufacturing Plants and Capacity Utilization
Ather Energy has a manufacturing facility in Hosur, Tamil Nadu with an annual capacity of 4,20,000 E2Ws and 3,79,800 battery packs. The plant has 2 E2W assembly lines and 3 semi-automated battery assembly lines with a 4th one in development. The company has achieved an assembly time of 48 seconds per E2W and 43 seconds per battery pack.
Despite that, capacity utilization is low at 29% for both E2W and battery production in FY 2024, down from 40% in FY 2023. To scale up, Ather is setting up Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra which will increase production capacity by 5,00,000 E2Ws per year in Phase 1 (by March 2027) and eventually 10 Lakh units per year, taking total capacity to 14 Lakh units per year. The challenges are demand growth and battery production constraints which the company is addressing through automation upgrades and in-house manufacturing expansion.
#4 Ather Energy IPO Details and Offer Structure
Ather Energy’s IPO comprises a fresh issue worth INR 3,100 crore and an offer for sale (OFS) of 2,20,00,766 shares. In addition, there is a reservation for shareholders of Hero MotoCorp. The IPO allocation is structured as follows:
- Qualified Institutional Buyers (QIBs): 75%
- Non-Institutional Investors (NIIs): 15%
- Retail Investors: 10%
- Employee & HMCL Shareholders Reservation: Certain portions reserved
- Promoters: Tarun Mehta, Swapnil Jain, and Hero MotoCorp
- Major Investors: Caladium Investments Pte Ltd, National Investment & Infrastructure Fund (NIIF)
The IPO is expected to see lots of interest from institutional and retail investors given the growth of the Indian EV market. With listing on both NSE and BSE, this will be the benchmark for future EV-related listings in India.
#5 Financial Performance and Growth Trends
| FY 2022 | FY 2023 | FY 2024 | |
| Revenue | 408.9 | 1,780.9 | 1,753.8 |
| Expenses | 757.9 | 2,666.3 | 2,674.2 |
| Net Loss | (344.1) | (864.5) | (1,059.7) |
| Margin (%) | (84.15) | (48.54) | (60.42) |
| ROCE (%) | (85.02) | (69.94) | (118.68) |
| EBITDA (%) | (62.0) | (38.0) | (36.0) |
| Debt/Equity | 1.62 | 1.09 | 0.88 |
| Vehicles Sold Growth (%) | 373 | 294 | 19 |
#6 Use of IPO Proceeds
The company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:
- Capital expenditure to be incurred by the company for the establishment of an E2W factory in Maharashtra – INR 927.2 crore
- Repayment/ pre-payment, in full or part, of certain borrowings availed by the company – INR 378.2 crore
- Investment in research and development – INR 750 crore
- Expenditure towards marketing initiatives – INR 300 crore
- General corporate purposes
#7 Competitive Landscape and Market Position
Ather competes with Ola Electric, TVS, and Bajaj in electric two-wheeler space. Ola Electric leads in sales volume. The company operates in a highly competitive Indian electric two-wheeler market where it faces competition from Ola Electric, Hero Electric, TVS Motor, and Bajaj Auto. Ola Electric leads the segment with aggressive pricing and a 42.4% market share, Ather has carved a niche with premium, technology-driven scooters and has a 12.2% market share.
Unlike Hero Electric which dominates the budget segment with an extensive dealership network, Ather follows a direct-to-consumer model with digital engagement and brand loyalty. Compared to TVS and Bajaj Auto which are legacy players with financial backing and a mix of ICE and EV offerings, Ather is a pure EV brand relying on external funding and the upcoming IPO to fund their growth. Their growth strategy is on R&D, charging infrastructure, and premium product differentiation, and is positioned as an innovation-driven player in the Indian EV landscape.
#8 Sales, Service, and Customer Retention
Ather Energy employs an asset-light distribution model, with 208 experience centers across 154 Indian cities and three in Nepal. It operates 191 service centers, ensuring accessibility through data-driven location selection. In January 2024, Ather launched ExpressCare centers for one-hour servicing at select locations. The Ather App enhances customer convenience with digital service bookings and tracking. To boost customer retention, Ather organizes community events, influencer campaigns, and interactive retail experiences, strengthening brand loyalty and engagement.
#9 Ather Energy IPO: Strengths
✅ India’s First EV Fast-Charging Network – 2,600+ Ather Grid chargers, giving it a first-mover edge.
✅ High-Margin Software Revenue – 6% of total revenue from software (56% EBITDA margin) via Atherstack subscriptions.
✅ Strong R&D Focus – 48% of the workforce in R&D, 273 patents filed, ensuring in-house tech control.
✅ Premium Brand Positioning – Competes in the high-performance EV segment, unlike budget-focused rivals.
✅ Massive Scale-Up with Factory 3.0 – New Maharashtra plant to push capacity to 14 Lakh units annually.
#10 Ather Energy IPO: Risks and Challenges
- High Battery Dependency, No In-House Cell Production – Relies on imported lithium-ion cells, making it vulnerable to global supply chain shocks & price fluctuations.
- Limited Financial Muscle vs. Giants – Competes with Hero, Bajaj, TVS, and Ola, all of whom have stronger cash reserves & wider dealer networks.
- High R&D Spending, Yet Not Profitable – Despite INR 236.5 crore in R&D (FY24), the company remains loss-making, raising concerns about long-term sustainability.
- EV Financing & Resale Value Issues – Lack of structured financing for EVs & uncertain resale value makes ownership expensive for customers.
- Scaling Ather Grid Is a Challenge – Expanding 2,600+ charging points requires third-party partnerships, facing land, regulatory, and power supply issues.
Ather Energy IPO: Conclusion
Ather Energy’s IPO offers a great investment opportunity in India’s growing EV market driven by technology leadership, capacity expansion, and strategic partnerships. Positioned at the forefront of the Indian EV revolution, Ather has robust growth plans, strong investor backing, and an increasing market presence.
However, profitability is a concern along with financial losses and regulatory changes. Despite these challenges, the long-term outlook is positive as the Indian EV ecosystem evolves. For strategic investors looking to invest in the future of mobility, this IPO is a high growth opportunity but with inherent risks to be evaluated carefully.