Ather Energy Limited files DRHP with SEBI: to raise funds through an IPO
Ather Energy Limited, a pioneer in the Indian electric two-wheeler (E2W) market and a pure play EV company that designs all its products ground-up in India has filed the draft red herring prospectus (DRHP) with capital markets regulator, SEBI to raise funds through an initial public offering (IPO). The company is promoted by Tarun Mehta, Swapnil Jain and Hero Motocorp Ltd.
The IPO of the Bengaluru headquartered company comprises of a Fresh Issue of equity shares aggregating up to Rs. 3,100 crore and an Offer for Sale (OFS) of up to 2,20,00,766 equity shares by the Selling Shareholders.
The selling shareholders include: Promoter Selling Shareholders: Tarun Sanjay Mehta – up to 1,000,000 Equity Shares; Swapnil Babanlal Jain – up to 1,000,000 Equity Shares; Corporate Selling Shareholders: Caladium Investment Pte Ltd – up to 10,520,000 Equity Shares; National Investment and Infrastructure Fund II – up to 4,616,519 Equity Shares; Internet Fund III Pte. Ltd. – up to 4,000,000 Equity Shares; 3State Ventures Pte. Ltd. – Up to 480,000 Equity Shares; IITM Incubation Cell – up to 310,495 Equity Shares; IITMS Rural Technology and Business Incubator – up to 41,910 Equity Shares; Individual Selling Shareholders: Amit Bhatia – up to 18,531 Equity Shares; and Karandeep Singh – up to 13,311 Equity Shares.
Ather Energy Limited proposes to utilize the Net Proceeds of the Fresh Issue towards funding of capital expenditure requirements for establishment of an E2W factory in Maharashtra (Rs. 927.2 crores); investment in research and development (Rs. 750 crores); repayment or pre-payment, in full or part, of certain borrowings availed by the company (Rs. 378.2 crores); expenditure towards marketing initiatives (Rs. 300 crores); and general corporate purposes.
A Pre-IPO placement of specified securities may be undertaken by the company aggregating up to Rs. 620 crores, prior to filing of the RHP with the RoC. If the Pre-IPO placement is undertaken, the fresh issue size will be reduced to the extent of such Pre-IPO placement.
The Book Running Lead Managers to the offer are Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, JM Financial Limited, and Nomura Financial Advisory and Securities (India) Private Limited.
The equity shares are proposed to be listed on BSE and NSE.
Established in 2013, Ather Energy designs and develops E2Ws, battery packs, charging infrastructure, associated software and accessories as well as manufactures battery packs and assembles E2Ws in-house. In Fiscal Year 2024, Ather Energy sold 109,577 E2Ws and was the third largest player by volume of E2W sales, as per the CRISIL report.
Ather’s current E2W portfolio comprises two product lines – the Ather 450 line, which caters to customers seeking performance scooters, and the Ather Rizta line, which is targeted at customers seeking convenience scooters for their family.
It assembles E2Ws and manufactures battery packs at its manufacturing facilities located in Hosur, Tamil Nadu. As at March 31, 2024, it had a total annual installed capacity of 420,000 units for E2Ws and 379,800 units for battery packs and it is in the process of building its Factory 3.0 in Chhatrapati Sambhajinagar (formerly Aurangabad), Maharashtra and is expected to expand its total production capacity to 1.42 million E2Ws following the final phase of construction.
Its E2Ws are complemented by its product ecosystem which comprises charging infrastructure, accessories and the Atherstack, an in-house developed software that powers its products.
According to the CRISIL Report, the company is the first 2W OEM to establish a 2W fast charging network in India in 2018 and the Ather Grid is India’s widest 2W fast charging network, as at March 31, 2024. Its EV charging solutions comprise (i) the Ather Grid, a public charging network of 1,973 fast chargers and 510 neighbourhood chargers spread across 233 cities in India and Nepal, as at March 31, 2024, and (ii) its portable home chargers for home charging, which are bundled and sold with our E2Ws.
Ather Energy operates an asset-light distribution model comprising experience centres and service centres operated by third-party retail partners in India and through its authorised distributor in Nepal. It had 208 experience centres and 191 service centres in India, and three experience centres and one service centre in Nepal, as at March 31, 2024.
The competitive strengths are the company’s ability to pioneer new technologies. Its E2Ws are positioned at a premium price within their respective segments in the Indian E2W market. It has vertically integrated approach to product design with strong in-house R&D capabilities. It has software-defined ecosystem that drives customer engagement and margins.
It has scalable technology platform enabling accelerated product launches. It has capital efficient and flexible operations. It has experienced management team and long-term investors committed to strong corporate governance standards.
As of Fiscal 2024 its revenue from operations was Rs. 1,753.8 crore.
