Ather Energy’s IPO Opening Soon

Ather Energy, a prominent electric two-wheeler manufacturer, is set to launch its initial public offering (IPO) for subscription from April 28 until April 30. This IPO is designed to be advantageous not only for the selling shareholders but also for employees holding employee stock options (ESOPs).

In this IPO, investors and promoters plan to sell shares worth Rs 530 crore through an offer for sale, while employees will need to hold on to their stakes for a duration that could range from a few months up to a year before they can cash in.

As per Ather’s red herring prospectus, the company’s total pool of ESOP stands at 16.23 million. Valued at the upper price band of Rs 321 specified in the RHP, Ather’s total outstanding ESOPs would be approximately worth Rs 530 crore (around $62 million).

Importantly, the company has allocated 4.6 million employee stock options since the beginning of FY25 until the RHP filing date.

IPO Size and Structure

Ather Energy’s upcoming public listing features a total issue size amounting to Rs 2,980.7 crore. This includes a fresh issue of Rs 2,626 crore alongside an offer for sale worth Rs 354.76 crore.

For individuals interested in the fresh issue, bidding starts with a minimum of one lot consisting of 46 shares, which will need an initial investment of at least Rs 13,984. The IPO is structured as a book-built issue, with 75% of the offer reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 10% allocated to retail investors.

Offer-for-Sale Details

In the offer-for-sale component, Tiger Global intends to release 4,00,000 equity shares, which they purchased at an average price of Rs 38.58 per share, indicating a remarkable return on investment of 8.3 times. On the other hand, Caladium Investment is projected to achieve a substantial 57% return.

Company Performance Overview

Throughout the initial nine months of FY25, Ather Energy recorded sales of 1,08,000 vehicles, generating revenue of Rs 1,578.9 crore. Nevertheless, the company also reported a loss of Rs 579.6 crore during this same timeframe. For the fiscal year concluding in March 2024, Ather Energy disclosed revenue figures of Rs 1,753 crore while also recording a loss of Rs 1,062 crore.