Ather Energy Enters Unicorn Club: A Look at the EV Company's IPO Plans, Fundraise and More

Ather Energy has become the latest company to join the unicorn club with its latest fundraise. The electric vehicle company raised Rs 600 crore in funding from existing investors, including the National Investment and Infrastructure Fund (NIIF). This is as per an Economic Times report. 

NIIF reportedly put around Rs 600 crore in the latest funding round. With this funding, the valuation of the company has reached $1.3 billion.

In May this year, the electric vehicle company also secured $34 million in funding through a combination of debt and equity, primarily from venture debt and its co-founders. The company has raised $502M over 19 rounds as of August 13 as per data platform Tracxn.

From Concept to Reality: A Look at the Beginning

Tarun Mehta and Swapnil Jain, two graduates from IIT Madras, started Ather Energy in 2013. Mehta’s passion for electric vehicles led him to leave his job at Ashok Leyland in 2012 to focus on improving battery packs. 

Realising that battery packs were just one part of the problem, Mehta and his team decided to create a new electric vehicle from scratch. Jain joined Tarun and conceptualised Ather Energy with him in 2012. 

Some of the investors of the company include Tiger Globe Management, Flipkart co-founders Sachin Bansal and Binny Bansal, Innoven Capital and others. 

Read: Ather Energy Converts to Public Company Ahead of IPO: Report

The Bengaluru-based company designs, manufactures and sells electric scooters. It produces electric scooters equipped with brushless DC motors, fast charging, and Li-ion batteries, offering a range of 146 km. Some of its models include the Ather 450X and Ather 450S. 

Currently, Ather Energy has two manufacturing facilities in Tamil Nadu’s Hosur—one is dedicated to battery production while the other is focused on vehicle assembly. The company is planning to come up with its fourth facility in Maharashtra with an investment of more than Rs 2,000 crore. 

IPO Plans of the Company 

The Bengaluru-based company is planning to go public soon. Keeping in mind its IPO plans, Ather Energy also converted into a public entity in June this year. The company’s board reportedly approved the resolution to change the company’s name from Ather Energy Private Limited to Ather Energy Limited. 

Ahead of its IPO, the company has also reportedly picked up bankers including HSBC, JPMorgan and Nomura. It has also selected local bankers that include JM Financial Ltd. and Axis Bank Ltd. While the exact date of the IPO is not confirmed yet, it might take place in the second half of this year depending on market conditions. The valuation of the IPO will reportedly be $2 billion. 

In terms of its financials, the company’s revenue from operations decreased from Rs 1,784 crore in FY23 to Rs 1,754 crore in FY24. 

Read: Indian E-Two Wheelers Better than Global Counterparts, says Ather Energy Co-Founder

Similarly, the company saw a 337 per cent rise in operating revenue to Rs 1,784 crore, but its overall revenue remained flat. Additionally, its losses jumped by 150 per cent to Rs 864 crore in FY23. Speaking to Moneycontrol in April 2024, Mehta said that firm was affected due to macroeconomic slowdown. He said, “We were looking to increase our capacity; we were in the planning stage; however, the industry encountered a slowdown with subsidy being reduced. So we delayed signing up for new capacity creation.” 

Increase in EV Sales in India

The EV market has been increasing in India. EV sales in India are expected to increase by 66 per cent this year, as per research firm Counterpoint Research. 

According to a report by JMK Research & Analytics, India's EV sales are on the rise, with over 1.7 million units sold in the fiscal year 2024. 

Liz Lee, Associate Director of Counterpoint Research, reportedly said, “‘The rise in EV battery manufacturing, supported by key players like Ola, Reliance New Energy, and ACC Energy Storage, alongside the Make in India initiative, will lower manufacturing costs and boost EV sales.” 

Some of the competitors of Ather Energy include Ola Electric, Mahindra Electric, Simple Energy and more. Ather Energy has around nine per cent market share. The top position is taken by Ola Electric with a 35 per cent market share. Ola Electric also recently went public, becoming the first EV company to go for an IPO. Through the IPO, Ola Electric raised Rs 6,145 crore, which will be used for the expansion of its gigafactory, research and development, repayment/prepayment and other purposes. 

However, the EV sector in India has its own share of challenges, one being import dependency from China, charging infrastructure, overall cost and others. 

As per the Observer Research Foundation, in 2023, China led the way in battery production for EVs, accounting for more than 83 per cent of the global total and nearly 60 per cent of worldwide EV manufacturing. 

However, regarding import dependency from China, Mehta told the Rest of the World, “Today, we have already achieved 90%-plus localization in two-wheeler EVs, and we import only battery cells. But regarding import dependence, yes, it has to come down to ensuring better control over quality and cost. We are getting there, and it is just a matter of time.” 

Additionally, government support becomes important for the growth of electric vehicles. As per PTI, Mehta said, “Subsidies are not about helping companies grow; they're about accelerating adoption for the entire industry.” 

One of the demands of electric vehicle players has been the expansion of the FAME III subsidy. The subsidy was expanded till July 31, 2024, by the government; it was supposed to end on March 31, 2024. 

FAME II, active from 2019 to 2024, had a budget allocation of Rs 10,000 crore. Around 86 per cent of the fund was dedicated to demand incentives, aiming to boost the demand for electric vehicles across the country. The goal was to support the adoption of 7,000 e-buses, 5 lakh e-3 wheelers, 55,000 e-4 wheeler passenger cars and 10 lakh e-2 wheelers. 

Currently, Ather Energy has been focusing on its family scooter segment. As the name suggests, the target audience of the company is families. The scooter has facilities such as a large seat and charging point. Launched in 2024, the scooter is priced at Rs 1.10 lakh. Before this, Ather’s focus was the performance segment. The company sold over 226,000 electric vehicles as of June 2024. With the increasing competition in the EV segment, it remains to be seen how Ather fares in the long run.