Highlights
| Issue Size –: 7,53,04,970 shares | Issue Open/Close – 28 Apr / 30 Apr, 2025 |
| Price Band (Rs.) 304 – 321 | Issue Size (Rs.) – 29,807 mn |
| Face Value (Rs) 1 | Lot Size (shares) 46 |
Ather Energy Limited (AEL), incorporated in 2013, is a pure play EV company that sells E2Ws and the associated product ecosystem, comprised of software, charging infrastructure and smart accessories, all of which are conceptualised and designed by the company in India.
Their products are positioned at a premium price in their respective segments. AEL launched first product, the Ather 450, in June 2018 which caters to customers seeking performance scooters, and they launched the Ather Rizta line in April 2024, which is targeted at customers seeking convenience scooters for their family.
AEL sold 107,983 and 109,577 E2Ws in the 9MFY25 and FY24, respectively. As per reports, they were the 3rd and 4th largest player by volume of E2W sales in FY24 with E2W market share of 10.7 pct in 9MFY25 and 11.5 pct in FY24.
They were the first two-wheeler (2W) OEM to establish a 2W fast charging network, the Ather Grid, in India. Their software, the Atherstack, introduced industry-first connected features such as Over-The-Air (OTA) updates and ride statistics on the Ather app. As of February 28, 2025, globally, they had 303 registered trademarks, 201 registered designs and 45 registered patents, in addition to pending applications for 102 trademarks, 12 designs and 303 patents.
Out of the total proceeds of Rs. 29,807 mn, Rs. 9,272 mn would utilise for CAPEX for establishment of an E2W factory in Maharashtra, India, Rs. 400 mn would go towards repayment of portion of certain borrowing availed by the company, Rs. 7,500 mn would go towards R&D, Rs. 3,000 mn would go towards marketing initiatives. ~Rs. 8,788 funding general corporate purposes and Rs. 3,547 mn would go towards existing selling shareholders of the company.
Key Highlights
- India is the largest motorised two-wheeler (2W) market by volume in the world as of CY23 and had domestic sales of 18.4 mn units in FY24. 2W was the largest segment in this and contributed 73 pct of total volume. In last 15 years domestic 2W grew by 6.2 pct CAGR. The E2W segment is expected to grow at a CAGR of ~41 pct to ~44 pct to reach a market size of approximately 10.3 mn to ~12.3 mn units by FT31P. Such expansion will make it one of the fastest growing segments in the automotive industry in India.
- As of now the company has 2 products with 7 variants, going forward the company will launch two new platforms—EL (scooter platform) which is cost effective and targeting convenience scooter segment and Zenith (motorcycle platform) which targeting >125cc – 300cc, which will expand its addressable market to the total auto market by volume.
- At the Hosur Factory, AEL had a total annual installed capacity of 420,000 units for E2Ws and 379,800 units for battery packs as of 9MFY25. They are in the process of building the first phase of their Factory 3.0 in Chhatrapati Sambhajinagar to expand their total installed production capacity to 1.42 mn E2Ws upon completion of phase two. The total estimated cost of the Project is Rs. 11,226.99 mn out of which ~80 pct amount will be funded by IPO proceeds.
- They have a vertically integrated approach to design focused on delivering quality and user experience. They design and develop key components of their E2Ws, accessories and the Atherstack, the software that powers them, in-house. Atherstack software contributes 6 of sales and has the EBITDA margin of ~53 pct.
- AEL procure lithium-ion cells from third-party suppliers to avoid upfront capital investments into cell manufacturing. They similarly outsource the manufacturing of in-house designed chassis, BMS, VCU, motor controller, signal harness and fast charger, to third-party contract manufacturers.
- Ather key growth strategies include (i) Strategic expansion of their product portfolio through multi-product technology platforms (ii) Expand and deepen distribution network in India and beyond (iii) Improving operational efficiency and manufacturing capabilities through the establishment of Factory 3.0. (iv) Continue focus on unit economics. (v) Securing cell supply chain through long-term partnerships (vi) Continue to build the Ather brand. (vi) Pursue Selective Strategic Partnerships and Acquisitions.
- The company’s sales have grown by 107.10 pct CAGR over FY22-24 led by volume growth of 118 pct CAGR over same period. In FY24 the company reported sales of Rs. 17,538 mn, fell 1.52 pct YoY due to lower realization. However, Loss widens to Rs. 10,597 mn. As of 9MFY25 company registered sales/EBITDA loss/Loss of Rs. 15,789 mn/Rs. 3,700 mn/ Rs. 5,779 mn.
Key Risk
- The company incurred losses since incorporation and they have incurred negative cash flows from operations continuously since incorporation.
- Any disruptions in the availability and any changes in the pricing and quality of lithium-ion cells could cause significant disruptions to and adversely impact AEL business.
- AEL had Rs. 608 mn of contingent liabilities as of 9MFY25, which represented 56 pct of net worth. They had litigation amounting to Rs. 1162 mn, which represented 108 pct of their net worth.
- AEL may be subject to risks associated with strategic alliances or acquisitions. Hero MotoCorp own certain stake in the company and both make EV vehicles.
Financial Performance
| Particulars | FY22 | FY23 | FY24 | 9MFY24 | 9MFY25 |
| Sales (Rs.) | 4,089 | 17,809 | 17,538 | 12,304 | 15,789 |
| EBITDA (Rs. mn) | -2,550 | -6,867 | -6,494 | -4,229 | -3,700 |
| EBITDA Margin % | -62.36% | -38.56% | -37.03% | -34.37% | -23.43% |
| Profit/Loss (Rs. mn) | -3,441 | -8,645 | -10,597 | -7,764 | -5,779 |
| Working Capital days | -33 | -21 | -46 | -21 | -48 |
| Market Share % | 10.70% | 11.30% | 11.50% | 10.60% | 7.90% |
| Volume (000) | 23 | 92 | 110 | 74 | 108 |
Peer Comparison based on FY24 Financials
| Particulars | Ather | OLA | Bajaj | Hero | TVS |
| Sales (Rs.) | 17,538 | 50,098 | 4,48,704 | 3,77,886 | 3,91,447 |
| EBITDA (Rs. mn) | -6,494 | -10,341 | 1,04,652 | 60,839 | 56,058 |
| EBITDA Margin % | -37.03% | -20.64% | 23.32% | 16.10% | 14.32% |
| Profit/Loss (Rs. mn) | -10,597 | -15,844 | 77,082 | 37,422 | 17,785 |
| Market Share % | 11.50% | 35.09% | 11.40% | 1.85% | 19.33% |
| Volume (000) | 110 | 330 | 3,728 | 5621 | 4045 |
Valuation
Ather is a pioneer in the Indian electric two-wheeler (E2W) market they are a pure play EV company that designs all their products ground-up in India. The 2W industry is posed to grow led by Premiumization in the 2W Industry, Women participation in the workforce, shrinking replacement cycles and Ather is well place to ride this electrification race. But at the upper end of the price band of Rs. 321 the issue is priced at an EV/Sales of ~6.7x of its FY25E earnings. The issue looks fully priced. One can Avoid this issue and wait for listing for investment decision.
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