Ather Energy files draft papers with fresh issue of shares worth Rs 3,100 Cr

Bengaluru-based Ather Energy filed its draft red herring prospectus (DRHP) on Monday which includes a fresh issue of equity shares worth up to Rs 3,100 crore. 

The filing comes almost a month after its competitor Bhavish Aggarwal-led Ola Electric went public. 

According to the DRHP, the offer for sale size is around 22 million shares with a face value of Rs 1 each and will see promoters and co-founders Tarun Sanjay Mehta and Swapnil Jain each offloading about 1 million equity shares in the IPO. 

Axis Capital, HSBC Securities and Capital Markets, JM Financial and Nomura Financial Advisory and Securities are the lead bookrunning managers for the IPO. 

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The company entered unicorn status in August after raising $71 million in funding from existing investor National Investment Infrastructure Fund in a new funding round. 

NIIF will also offload around 4.6 million equity shares through the IPO. Caladium Investment, Internet Fund III and 3State Ventures are some of the other corporate selling shareholders in the IPO. 

According to the DRHP, Rs 927.2 crore of the net proceeds will be used for capital expenditure to be incurred by Ather for the establishment of an E2W factory in Maharashtra and Rs 378.2 crore will be used to repay certain borrowings of the company. 

The company reported a decline in its revenue from operations as at and for the year ended March 31, 2024 to Rs 1753.8 crore from Rs 1780.9 in the previous year. 

Ather also reported widening losses for the same period of Rs 1059.7 crore compared to Rs 864.5 crore as at and for the year ended March 31, 2023. 

Hero MotoCorp, a key investor in the company, increased its stake in the startup in June by purchasing an additional 2.2% stake for Rs 124 crore. The two-wheeler giant currently holds around 39.7% stake in the company, according to reports.

The company is also preparing to enter the Sri Lankan market through a joint venture between Sensex Capital Partners, Atman Group and Sino Lanka Private Limited. 

(Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric.)

(This copy was updated with additional details from the DRHP)