Bengaluru-based electrical two-wheeler maker Ather Vitality is ready to lift Rs 2,981 crore by way of an preliminary public providing (IPO) subsequent week, aiming for a valuation of round Rs 12,000 crore. The Hero Motocorp-backed agency’s IPO will break a nine-week dry spell within the major fairness market and follows rival Ola Electrical’s IPO in August final yr.
Ather’s public subject comes at a time when India’s electrical two-wheeler (E2W) market is consolidating quickly in favour of legacy gamers like Bajaj Auto, TVS Motor, and Hero Motocorp—the place EVs make up solely a small fraction of total gross sales.
Ola, a pure EV participant, noticed its market share dip from 34 per cent to 30 per cent in FY25 because it ceded floor to Bajaj and TVS, whereas persevering with to submit losses. Ather held regular at 11.6 per cent market share, making it the fourth-largest participant within the nation, with gross sales concentrated in South India.
The IPO proceeds can be used to construct a brand new manufacturing facility in Maharashtra (Rs 927 crore), fund R&D (Rs 750 crore), and assist advertising and marketing efforts (Rs 300 crore).
Ather holds floor as legacy giants circle Ola
In FY25, the highest 5 gamers in India’s E2W market—Ola, TVS, Bajaj, Ather, and Hero—collectively accounted for 86 per cent of complete car registrations, up from 79 per cent the earlier yr, reflecting a pointy rise in market focus.
Bajaj, buoyed by its Chetak electrical scooter vary, practically doubled its share from 11 per cent to twenty per cent. TVS edged up from 20 to 21 per cent, pushed by its iQube lineup. Hero’s Vida scooters helped the corporate double its market share from 2 to 4 per cent, based on information from market intelligence agency JMK Analysis.
This consolidation has coincided with robust total development within the phase, nonetheless supported by authorities subsidies. E2W registrations touched round 12 lakh items in FY25, a 20 per cent enhance from FY24. EV penetration within the two-wheeler class additionally rose, from 5.2 per cent to six per cent, and E2Ws now account for over half (55 per cent) of all EV registrations in India.
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Nonetheless, for legacy producers, electrical fashions account for under a small share of their total two-wheeler gross sales—11 per cent for Bajaj and eight per cent for TVS, based on JMK. And, with robust model fairness and wholesome money flows from different segments, they’re higher positioned to navigate the evolving market. For pure-play EV companies like Ola and Ather, the problem can be holding on to market share as competitors intensifies.
Ather bets large on electrical bikes, R&D
To remain aggressive, Ather is doubling down on higher expertise and model visibility. Of the Rs 2,981 crore it plans to lift by way of its IPO, the corporate will channel Rs 750 crore into R&D and Rs 300 crore into advertising and marketing.
In FY24, Ather spent 13 per cent of its income on R&D—led by a workforce of over 700 on-roll workers, together with design engineers, analysis scientists, industrial designers, information scientists and others.
A key R&D precedence for Ather going ahead can be to develop an electrical bike platform, a phase the corporate sees as each underserved and promising. This may add to its present Rizta and 450 collection of scooters.
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“Moreover, we’ll work on leveraging technological developments throughout numerous platforms comparable to powertrain, battery and software program and electronics in our merchandise to make our merchandise extra interesting to prospects whereas bettering our unit economics,” Ather stated in its last crimson herring prospectus (RHP) filed with market regulators on April 22.
The corporate can also be evaluating a brand new battery platform primarily based on lithium iron phosphate (LFP) chemistry, which is much less mineral-intensive and will carry down prices in comparison with its present use of nickel manganese cobalt (NMC) batteries. In parallel, Ather is exploring motor applied sciences that don’t depend on rare-earth metals or magnets—aiming to chop prices and insulate its provide chain from geopolitical shocks.
Subsidies key to pricing competitiveness, RHP warns
From the IPO proceeds, Ather will allocate Rs 927 crore to arrange a brand new E2W manufacturing unit in Maharashtra’s Chhatrapati Sambhaji Nagar district, which, together with its present Hosur facility, will practically triple manufacturing capability. Whereas the Maharashtra plant may assist Ather develop within the northern and western markets—the place it has much less of a stronghold—utilisation at its Hosur unit stays modest, at simply 40 per cent.
In contrast to Ola, which is constructing in-house lithium-ion cell manufacturing capabilities, Ather has no such plans.
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“We manufacture battery packs in-house utilizing lithium-ion cells procured from suppliers and outsource the manufacturing of all different car elements… to third-party suppliers,” the corporate acknowledged in its RHP.
Barring the lithium-ion cells sourced from China and South Korea, Ather claims vital native worth addition by way of home suppliers. Complying with native content material norms is vital for securing subsidies below the Centre’s Electrical Mobility Promotion Scheme (EMPS). In FY24, subsidies accounted for 16 per cent of Ather’s income from operations.
“Discount, elimination or ineligibility for presidency incentives… may cut back the demand for E2Ws and doubtlessly lead to us changing into much less value aggressive in comparison with standard ICE 2Ws,” the RHP famous.
Ather’s IPO, opening April 28, contains a recent subject of 8.18 crore shares price Rs 2,626 crore and a proposal on the market of 1.11 crore shares price Rs 354.76 crore. The corporate is focusing on a valuation of Rs 12,000 crore—roughly half of Ola Electrical’s present market cap of Rs 23,200 crore. The result of Ather’s providing is more likely to affect the timing of competitor Greaves Electrical Mobility’s IPO, which filed its draft RHP in December.
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Within the first 9 months of FY25, Ather reported Rs 1,579 crore in income from operations—a 28 per cent enhance year-on-year—whereas losses narrowed by 25 per cent to Rs 578 crore.