Electric two-wheeler manufacturer Ather Energy is gearing up for a significant milestone in its growth journey with plans to launch its initial public offering (IPO) at a valuation of $2.2-2.4 billion. This represents a substantial premium of over 80% compared to its valuation in August 2024, when it turned unicorn at $1.3 billion. The development signals growing investor confidence in the Indian electric vehicle (EV) market.
Updated DRHP Filing Imminent
Ather is set to file its updated draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) later this month or in the first week of February. The company has been working to provide final clarifications to the market regulator, as per sources familiar with the matter. This IPO will mark India’s second EV startup listing after Ola Electric.
“Ather will seek a valuation of $2.2-2.4 billion, based on current discussions,” said a source. The company’s Rs 3,100 crore ($360 million) IPO proposal has already received Sebi’s clearance, with only minor updates pending. While the company has refrained from commenting publicly, its valuation strategy is seen as a bold move, contrasting with the cautious approach adopted by many new-age businesses last year.
Rising Market Share and Strategic Moves
Ather has made significant strides in expanding its market share. From just 6% in April 2024, it grew to over 14% by the year’s end and has already touched 16% in January 2025, according to data from Vahan. This growth is attributed to its innovative launches, such as the Rizta, which cater to the family scooter segment traditionally dominated by competitors like Ola Electric.
The company’s flagship 450 series remains a strong player in the performance scooter segment, while the new Rizta model has gained traction, particularly in the northern and western regions of India. Ather’s market share in Gujarat, for instance, surged to 25% in December 2024 from just 5% in July, making it one of the firm’s fastest-growing markets.
Ather has also been expanding its physical presence with more experience centres, charging grids, and Gold Service centres for enhanced after-sales service. Its partnership with Amara Raja to support its new manufacturing facility in Aurangabad is another step towards scaling operations.
Competitive Landscape
The rise of Ather comes at a time when its main rival, Ola Electric, has seen its market share decline. In December 2024, Ola Electric’s market share fell below 20% for the first time, a steep drop from its 50% share in May. Traditional automakers like Bajaj Auto and TVS Motor have also intensified competition with their EV offerings.
IPO Valuation and Key Stakeholders
Ather’s upcoming IPO is set to benefit its key stakeholders significantly. Hero MotoCorp, which holds a 37% stake in the company, will not be selling any shares during the offer-for-sale (OFS) window and will continue to be a co-promoter. On the other hand, Flipkart cofounder Binny Bansal is expected to part-sell his stake, while Tiger Global and GIC remain prominent shareholders.
Nikhil Kamath, cofounder of Zerodha and an active investor in India’s internet economy, stands to gain considerably from the IPO. Kamath’s 5% stake in Ather, acquired by purchasing Flipkart cofounder Sachin Bansal’s holding, could now be valued at over $100 million. This marks a significant return on his estimated $40 million investment.
India’s IPO Boom in 2024 and Beyond
The year 2024 witnessed nine Indian startups going public. Industry experts predict this number could double in 2025 as more mid-stage startups explore IPOs as an alternative to private funding rounds. “For many mid-stage startups, IPOs have become a fair alternative to going for another private round of funding,” noted a venture investor.
Ather’s IPO comes alongside Bluestone, which is also preparing to list at a valuation of Rs 12,000-13,000 crore, marking a 50% premium over its last funding round. The willingness of companies like Ather and Bluestone to price their offerings at a premium underscores the evolving dynamics of the Indian startup ecosystem, where valuations reflect not just financial performance but also strategic plans and competitive positioning.
Financial Performance and Road Ahead
Ather’s financials indicate robust growth, with a significant rise in sales driven by its new product launches. The company’s Aurangabad facility is expected to further boost production capacity, enabling it to meet rising demand. Additionally, its focus on expanding charging infrastructure and enhancing customer experience is likely to cement its position in the EV market.
With the EV industry projected to grow exponentially in India, Ather’s IPO represents a unique opportunity for investors to capitalise on this trend. The company’s innovative product offerings, strategic partnerships, and strong market presence make it a promising player in the sector.
Conclusion
Ather Energy’s upcoming IPO is a testament to the rapid growth and potential of India’s EV industry. By seeking a valuation of up to $2.4 billion, Ather is not just aiming to raise funds but also to reinforce its position as a market leader. As the company prepares to take its next big leap, all eyes will be on how it delivers on its ambitious plans and navigates the competitive landscape.
With inputs from agencies
Image Source: Multiple agencies
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