Ather Energy’s Rs 2,981 crore IPO: A new chapter in India's EV growth story

On April 28, 2025, Ather Energy—a Bengaluru-based electric vehicle (EV) maker —will debut on the public markets with a highly anticipated initial public offering (IPO) totalling Rs 2,981 crore. The offering, priced in a band of Rs 304–321 per share, marks only the second pure-play electric two-wheeler IPO in India (after Ola Electric's listing in 2024)​

Ather's IPO is more than just a fundraising event; it's being hailed as a new chapter in India's EV growth story, symbolising the coming-of-age of the country's clean mobility startups. Investors, policymakers, and competitors alike are watching closely, as the IPO's success will signal broader confidence in the electric vehicle sector's prospects.

The significance of Ather's public debut cannot be overstated. Founded in 2013 by Tarun Mehta and Swapnil Jain in a college lab, Ather has grown from an idea nurtured at IIT Madras into one of India's leading electric scooter makers.

In a little over a decade, the startup progressed from building early prototypes to establishing a nationwide brand with thousands of high-performance e-scooters on the roads. Now, by going public at an implied valuation of around Rs 12,000 crore, Ather is entering a new arena.

The IPO will provide the company with fresh capital to scale up production, invest in R&D, and expand its market footprint – crucial moves as competition in the electric two-wheeler space intensifies.

It also offers a long-awaited payoff for early backers: Ather's founders and venture investors are partially cashing out, locking in substantial returns that underscore how far the startup has come. For instance, the company's Draft Red Herring Prospectus (DRHP) notes that the two IIT Madras incubators who seeded Ather with just about Rs 25 lakh in 2014 now hold shares worth about Rs 50 crore – a staggering 200x+ return.

Mehta and Jain, who each own a 6.81% stake, will also earn 1,422% returns, valuing their stakes at Rs 659 crore each. Similarly, US-based Tiger Global, which currently holds a 6.56% stake, will earn a 732% return, valuing its stake at Rs 634.32 crore. Hero MotoCorp, Ather's largest shareholder with a 38.19% stake, will earn a 120% return on its investment.

Beyond individual windfalls, Ather's IPO matters because it is a bellwether for India's electric mobility push. It comes on the heels of rival Ola Electric's blockbuster IPO in August 2024, which raised about $734 million and valued it at roughly $4.8 billion​. Ola's successful listing – the largest in India that year – signalled investor appetite for EV companies, even ones that are currently loss-making.

Ather's offering will test that appetite further. If warmly received, it could open the door for more EV startups to tap public markets, catalysing investment in an industry the government deems critical for reducing pollution and oil imports.

Conversely, a tepid outcome might raise questions about the viability of the crowded electric two-wheeler market. In short, Ather's IPO is not just about one company's fortunes – it is a barometer of the broader EV revolution in India, now accelerating from India's Silicon Valley and onto the Dalal Street.

The journey so far

Ather Energy's origin story is now Indian startup lore. The journey began in a robotics lab at IIT Madras, where Tarun Mehta and Swapnil Jain, two engineering graduates with a passion for clean mobility, disassembled a commercially available electric scooter (the YO EXL) to study its inner workings. What they found was both inspiration and opportunity: existing e-scooters were primitive – underpowered lead-acid batteries, limited range, uninspired design – leaving much room for innovation.

In 2013, armed with the conviction that they could build a superior product, Mehta and Jain founded Ather Energy in Bengaluru. Their alma mater's incubation cells took a leap of faith on the young entrepreneurs, providing early office space, mentorship and a seed investment on favourable terms. In return, IIT Madras's incubators received a 5% of paid-up share capital in the fledgling startup—a stake that would become enormously valuable years later.

According to RHP, the two incubation cells—IIT Madras Incubation Cell (IITMIC) and the IITM Rural Technology and Business Incubator (RTBI)—currently hold a combined 15.58 lakh shares worth more than Rs 50 crore at the upper price band of Rs 321 per share.

By 2014–15, Ather had developed a working prototype of a smart, lithium-ion battery-powered scooter and attracted its first institutional investor, Tiger Global. The startup's vision of building an "Indian Tesla for two-wheelers" drew high-profile backers.

In 2016, legacy automaker Hero MotoCorp—India's largest two-wheeler manufacturer—made a strategic investment in Ather, eventually becoming its single largest shareholder. This infusion of capital and credibility enabled Ather to set up an R&D centre and prepare for commercial production.

By 2018, Ather launched its first product, the Ather S340, followed quickly by the improved Ather 450 electric scooter. These models – with their sleek design, touchscreen dashboards, and relatively peppy performance – were a revelation in a market used to clunky battery scooters. Ather opened experience centres in Bengaluru and Chennai, where curious riders could test ride the Rs 1+ lakh scooter and even see the startup's proprietary fast-charging network (branded Ather Grid) in action.

Over the next few years, Ather steadily built on its early-mover advantage. It rolled out upgrades like the 450S and 450 Plus, offering better range and acceleration, and expanded sales to other major cities. Investors continued to bet on its growth. In 2019, Flipkart co-founder Sachin Bansal invested $32 million in Ather as part of a $51 million fundraise, and Hero MotoCorp converted some debentures to equity to increase its stake. It is worth noting that Sachin Bansal began investing in Ather in 2014, before eventually exiting in June 2024.

By 2022, Ather had raised over $336 million from marquee investors including Tiger Global, Sachin and Binny Bansal, and India's sovereign-linked NIIF. That year, Ather inaugurated a new manufacturing plant in Hosur, Tamil Nadu, with an installed capacity of 420,000 scooters per annum​. The startup even earned "unicorn" status (>$1 billion valuation) after a funding round led by NIIF last year.

However, the journey hasn't been without bumps. In mid-2023, a reduction in government subsidies briefly hit Ather's sales (more on that later), forcing the startup to recalibrate. Yet, by the end of 2024, Ather was back to robust growth, selling over 100,000 scooters annually and firmly ensconced as the #3 electric two-wheeler maker in India by volume.

IPO details: breaking down the numbers

After months of speculation, Ather Energy's Draft Red Herring Prospectus and subsequent filings have laid bare the specifics of its IPO. The total issue size is Rs 2,981 crore, of which Rs 2,626 crore is a fresh issue of new shares and about Rs 355 crore is an offer for sale (OFS) by existing shareholders at the upper end of the price band.​

This fresh issue component was slightly trimmed from the Rs 3,100 crore Ather had initially planned in its draft prospectus – the startup opted to raise ~15% less primary capital, citing improved internal finances and lower debt needs. The price band has been set at Rs 304–Rs 321 per share, with a face value of Re 1 each.

At the top-end price, Ather's valuation would be roughly Rs 11,956 crore, and the IPO would result in the company's equity being fully diluted by about 20–25% to public shareholders.

The shareholding and offer-for-sale details reveal interesting insights. Ather's promoters – co-founders Tarun Mehta and Swapnil Jain, along with Hero MotoCorp—collectively held 51.8% of the company pre-IPO​.

Hero MotoCorp is not selling any shares in the IPO. The two founders, however, will each offload 9.8 lakh shares (approx Rs 31–32 crore worth for each) as part of the OFS. Even after this sale, Tarun and Swapnil will retain significant holdings and continue to lead the company, but the sale gives them a hefty payday – a >14x return on their nominal per-share cost of just Rs 21. 

Early investor Tiger Global is also paring its stake, selling roughly 4 lakh shares (~Rs 13 crore worth) via its Internet Fund vehicle. Two relatively recent investors – Caladium Investment Pte. Ltd. (an affiliate of the Singapore sovereign wealth fund GIC) and NIIF – are each selling chunks of shares worth Rs 192.7 crore and Rs 84.6 crore, respectively. 

Their returns are more modest (about 1.6–1.7x, since they invested around 2022)​ , but the fact that they're only trimming stakes suggests they see further upside. Notably, the IIT Madras incubation cells that nurtured Ather are also cashing in a sliver of their holding (around Rs 1.13 crore via OFS), though the lion's share of their stake remains intact to potentially appreciate post-listing.

On the fund utilisation side, Ather has outlined clear priorities. The primary proceeds of Rs 2,626 crore will largely go towards fueling growth. The company will set up a new manufacturing facility in Maharashtra with a capacity of around 1 million units per year, which will massively expand its production beyond the existing Hosur plant.

A portion of the funds will also be used to repay debt, given that Ather had accumulated borrowings to finance working capital and earlier expansion. Additionally, Ather is allocating money for R&D and product development, as it works on next-generation models (including an electric motorcycle platform) to stay ahead of the curve. Some funds are earmarked for sales network expansion and marketing to reach new customers, and any remainder for general corporate purposes.

In essence, the IPO money is meant to bankroll Ather's scale-up from a niche premium player to a mass-volume manufacturer over the next few years. The offering's timing also appears favourable.

In FY24, Ather reported a loss before taxes of Rs 1,059.7 crore, significantly higher than the Rs 864.5 crore loss recorded in FY23 and the Rs 344.1 crore loss in FY22. Additionally, the company experienced flat revenue growth in FY24, posting revenues of Rs 1,753.8 crore, down from Rs 1,780.9 crore in FY23.

Ather's most recent financials show improvement: in the April–December 2024 period, operating revenue rose 28% year-on-year to Rs 1,579 crore and net losses narrowed by 25% to Rs 578 crore.

This positive momentum likely helped Ather make its case to potential investors that the company is on the path toward profitability, even if full break-even may be a few years away.

Ather vs Ola Electric: The emerging rivalry

No story of Ather Energy is complete without comparing it to its most formidable rival, Ola Electric. In many ways, the two startups represent twin driving forces of India's EV two-wheeler revolution – but with starkly different styles and fortunes.

Ola Electric burst onto the scene in 2021 with splashy marketing, ultra-aggressive pricing, and the ambition to become the country's EV champion overnight. By mid-2024, Ola had indeed taken the lead, capturing approximately 39% of India's electric scooter market share—far outpacing Ather's roughly 10–12% share. Ola's production volumes have dwarfed Ather's: in 2024, Ola sold on the order of a few hundred thousand scooters, compared to Ather's one lakh-plus units.

This scale advantage helped Ola list with much fanfare – its IPO in August 2024 raised over Rs 6,200 crore, and the stock surged about 100% in the first two weeks of the listing. In contrast, Ather's IPO is smaller (Rs 2,981 crore) and its valuation ($1.5 billion) reflects its more measured growth trajectory. The rivalry, however, is not simply a numbers game of who sells more – it encapsulates differing philosophies on product, distribution, and growth.

Ather has prided itself on engineering depth and quality, often likened to the “Apple of scooters” for its premium hardware-software integration. Since inception, Ather invested in designing core components in-house – from battery packs and battery management systems to the sleek touchscreen dashboard UI​.

It chose to grow steadily, focusing first on a few urban markets and refining its product through multiple iterations. Its sales model relies on experience centers and dealer franchises (over 130 across India by 2025) where customers can test ride and get after-sales support. This approach ensured strong customer satisfaction and a loyal following, but it limited how fast Ather could scale initially.

Ola Electric, by contrast, opted for a blitzkrieg strategy. Spun out of ride-hailing giant Ola, it set up a large “Futurefactory” in Tamil Nadu and began selling its Ola S1 scooters online through direct-to-consumer channels, bypassing dealers. Ola targeted the mass market with aggressive pricing (its base model was priced well under Ather’s flagship) and pushed volumes rapidly. In doing so, Ola did encounter quality control issues and customer service complaints early on, but it iterated quickly. By 2023, Ola’s monthly sales were far ahead of Ather’s, forcing the older startup to respond.

The competition has clearly spurred innovation and expansion on both sides. When Ola announced plans for lower-cost variants and even electric motorbikes, Ather accelerated work on its own new models. In April 2024, Ather introduced the “Rizta”– a scooter aimed at family buyers seeking comfort and utility over raw performance. The Rizta featured a longer seat, more storage (including a whopping 56 liters underseat, per company claims) and convenience features like smartphone connectivity for WhatsApp alerts and even voice commands via Alexa.

This model opened up a new customer segment for Ather that its pricier 450X wasn’t penetrating​. Meanwhile, Ola’s splashy entry into electric motorcycles (unveiling multiple bike models in August 2024) underscored that the battle is moving to new arenas of two-wheeler electrification.

Here too, Ather has an answer in the works: the company is developing a platform codenamed “Zenith” to launch electric motorbikes in the 125–300cc equivalent category. It’s a sign that Ather doesn’t intend to cede any category to Ola without a fight.

The rivalry also extends to how each leverages ecosystem and policy. Ola, benefiting from its late-mover timing, secured government incentives like the Production-Linked Incentive (PLI) for EV manufacturers – subsidies that improve its margins. Ather, which did not qualify for the PLI scheme, had to compete without that support.

"Not having PLI gives us added incentive to push our cost down aggressively. We managed a 31% cost reduction over the last 3–4 years,” he told Economic Times, noting that Ather worked on alternate revenue streams like selling software feature subscriptions that now add 6% to its revenue.

Indeed, Ather offers an optional performance and connectivity “software stack” to customers for a fee, and an impressive 86% of buyers opt in, boosting Ather’s margins​. This kind of tech-centric monetization is something Ola might emulate as well. All said, the Ather vs. Ola Electric matchup is shaping up to be a long-term contest, reminiscent of classic duels like Coke vs Pepsi – each pushing the other to innovate, cut costs, and win consumer mindshare.

For investors and EV enthusiasts, this healthy competition is a boon, as it will hasten improvements and bring more choices to the market.

"We’ve proven we can compete, and compete hard, while continuing to innovate," Mehta said.

India’s EV two-wheeler market: The big picture

Stepping back, Ather’s rise and its rivalry with Ola unfold against the backdrop of India’s enormous two-wheeler market – a landscape undergoing a historic shift from petrol to electric. India is the world’s largest market for two-wheelers, with total domestic sales of 18.4 million motorbikes and scooters in FY2023–24​.

These ubiquitous vehicles – from humble 100cc commuter bikes to high-end motorcycles – are the lifeblood of India’s transportation, accounting for over 70% of all vehicles on the road​. For decades, this market was dominated by petrol engines, but in the last few years, electrification has picked up remarkable speed.

In FY19, electric two-wheeler (E2W) sales in India were negligible; by FY2024, EVs made up about 5–6% of total two-wheeler sales. That still means over 94% of buyers chose petrol, so the room for growth is massive – and therein lies the opportunity that Ather and others are chasing.

Government policy has been a major catalyst in kick-starting the EV two-wheeler sector. The FAME-II scheme (Faster Adoption and Manufacturing of Electric Vehicles) launched in 2019 offered upfront purchase incentives up to Rs 15,000 per kWh for EV two-wheelers, which significantly reduced their effective cost to consumers. 

Ather’s premium scooters, for example, benefited from subsidies that brought their price closer to petrol scooter prices, helping persuade early adopters. This led to triple-digit annual growth in E2W sales through 2021 and 2022. By 2023, however, the government began tapering these subsidies.

In June 2023, the FAME-II incentive was slashed from Rs 15,000/kWh to Rs 10,000/kWh​, raising prices for customers. Then, by March 2024, the FAME-II program approached its scheduled end-of-life. These changes caused a short-term dip in EV sales growth (indeed, Ather’s revenue in FY24 was flat in part due to the subsidy cut reducing demand). Still, the market has shown resilience – March 2024 saw a record 140,000+ electric two-wheeler sales as buyers rushed in before subsidies expired, and the industry expects continued momentum as costs fall independently of subsidies.

Apart from purchase incentives, the government’s PLI scheme for advanced batteries and EV manufacturing has lured companies to invest in local production. Major two-wheeler OEMs like Hero MotoCorp, Bajaj Auto, TVS Motor, as well as newcomers like Ola, have secured PLI benefits to set up EV factories and battery lines.

Ather notably did not meet the criteria to receive PLI subsidies​—a fact that could have been a disadvantage, but as noted earlier, Ather used it to drive internal efficiency.

Meanwhile, state governments are also pitching in: states like Maharashtra, Tamil Nadu, and Karnataka offer their own EV policies including tax breaks and road tax exemptions to EV buyers, further sweetening the deal for consumers. Another pillar of the big picture is the incumbent automobile industry finally leaning into electrification.

For years, startups like Ather and Okinawa operated in a space largely ignored by the heavyweights. That changed once EV sales took off. Today, every major two-wheeler manufacturer in India has skin in the game. TVS Motor Company launched its iQube electric scooter and has aggressively expanded it across India, quickly grabbing the #2 spot in E2W sales behind Ola. Bajaj Auto resurrected its iconic “Chetak” brand for an electric scooter.

Hero MotoCorp, after investing in Ather, also launched its own Vida electric scooter in 2022, signaling a hedging of bets – it now competes with Ather in showrooms even as it remains the startup’s largest shareholder.

Hero Electric (a separate entity from MotoCorp) and Okinawa (an early EV scooter seller) had significant sales as well, though they faced setbacks due to subsidy compliance issues. Collectively, these players and others like Ampere (Greaves Electric) and Okinawa have made India a hyper-competitive E2W arena with dozens of models on sale. This competition is driving innovation and choice: consumers can find everything from low-speed budget e-scooters to high-performance models like the Ultraviolette F77 motorcycle.

The upshot of these trends is that India’s transition to EV two-wheelers appears irreversible. The central government has set a goal of 30% of all vehicles sold by 2030 to be electric, and for two-wheelers specifically, various analyses foresee anywhere from 50% to even 80% of new sales being electric by the end of this decade.

Supporting infrastructure is catching up too: hundreds of public charging stations have sprung up in cities, and battery-swapping networks are emerging for commercial two-wheelers (like delivery fleet bikes).

Importantly, consumer attitudes have shifted – what was once a niche (early adopters and environmentally conscious buyers) is steadily going mainstream as people recognize the economic benefits (lower running costs, less maintenance) of EVs.

In 2023, surging petrol prices and improved EV models led many daily commuters to seriously consider electric for the first time. As Tarun Mehta observed, factors like “lower ownership costs and ease of use” are driving the EV sector, and the switch from petrol to electric “remains unchanged” in its direction.

In sum, the big picture is one of huge potential: India’s two-wheeler market is gigantic, and even a modest slice shifting to electric translates to millions of vehicles – an opportunity Ather and its peers are racing to seize.

Growth projections and opportunities ahead

With the stage set for an electric two-wheeler boom, Ather Energy is positioning itself to capitalize on the growth ahead. Industry forecasts are bullish: the Indian two-wheeler market (combining ICE and EV) is projected to expand to ~30 million units annually by FY231, growing at about 7% CAGR. Within that, the electric segment is expected to see exponential growth as technology matures.

Consultancy Arthur D. Little estimates roughly 30% of all vehicle sales in India could be electric by 2030, and two-wheelers will likely form the bulk of that given their faster adoption rate. Some optimistic scenarios even envision electric 2Ws becoming the majority of new sales by the early 2030s, especially if battery prices continue to drop and charging infrastructure spreads.

For Ather, which has already established itself in the premium e-scooter niche, the challenge and opportunity lie in scaling up and broadening its portfolio to ride this wave.

One immediate avenue of growth is volume expansion through new production capacity. The IPO funding will enable Ather to build a second manufacturing plant in Maharashtra with a capacity of up to 1 million scooters per year​. Combined with its existing Hosur facility (which can do ~0.42 million units/year), Ather would have the infrastructure to produce well over a million vehicles annually in the coming years.

This is crucial to catching up with rivals like Ola that already boast large factories. Ather is likely to ramp up output in stages, aligning with demand – but having the headroom to scale quickly gives it flexibility to exploit surges in market uptake. Additionally, increased production typically yields economies of scale, which could help Ather lower its unit costs and potentially offer more competitive pricing without eroding margins. Another key growth lever is product diversification.

Until now, Ather has essentially sold variations of one scooter platform (the 450 series). Going forward, the company has revealed plans for multiple new platforms to address different segments. As mentioned, Ather is developing two new platforms codenamed “EL” and “Zenith.”

The EL platform will focus on cost-efficient scooters – likely meaning Ather will design more affordable models with a lower price point than the 450X, to target the mass-market scooter buyer​. Such a product could vastly expand Ather’s addressable market beyond urban enthusiasts to more value-conscious consumers, especially in tier-2 and tier-3 cities.

Meanwhile, the Zenith platform is aimed at electric motorcycles in the 125–300cc category​. This is an exciting development: it signals Ather’s intent to enter the huge motorcycle market, which in India far outsizes the scooter market in terms of numbers.

Ather’s first bike (whenever it launches) would pit it against not just Ola’s upcoming bikes but also against traditional petrol bikes from Bajaj, Honda, Royal Enfield (in performance terms), etc. If Ather can replicate its success in scooters with a compelling electric motorbike, it could unlock a massive new customer base.

The timeline for these new launches hasn’t been made public, but Tarun Mehta has indicated that product expansion will support mid-to-long-term growth, complementing the near-term boost from expanding the sales network.

Indeed, sales and distribution expansion is another opportunity Ather is actively pursuing. The company has been rolling out experience centers and dealership franchises across the country – from under 30 cities in 2021 to over 80 cities by 2024.

Post-IPO, it plans to penetrate deeper into smaller towns and semi-urban areas, many of which are only just starting to see EV adoption. As Mehta noted, improving distribution is crucial to drive growth in the near term.

Ather’s retail strategy, leveraging partners for dealership operations, allows relatively asset-light expansion (as opposed to company-owned stores). With fresh capital, Ather can accelerate this rollout, ensuring that as awareness of EVs rises, an Ather showroom isn’t too far away for interested buyers.

Moreover, Ather’s investment in charging infrastructure (Ather Grid) and after-sales service capabilities in new geographies will bolster consumer confidence to make the switch. There are also broader tailwinds to seize. One is the localization of the EV supply chain in India. The Indian government’s push for local battery manufacturing is starting to bear fruit – several companies are setting up lithium-ion cell factories domestically.

For Ather, increased localization can reduce costs (shielding it from volatile global commodity prices and forex swings) and improve supply stability. Ather already prides itself on designing ~80% of its vehicle’s components in-house​; if those designs can be produced at scale within India, it strengthens Ather’s vertical integration advantage.

Another opportunity is the potential introduction of new government incentives or regulations favoring EVs – for instance, some experts speculate on a FAME III scheme or stricter emissions norms for two-wheelers that could indirectly boost EV adoption.