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India’s EV startup Ather cuts IPO size to $308M, seeking $1.4B post-moneyvaluation

Ather Energy, an Indian electric two-wheeler startup, has reduced its IPO size by 18% to $308 million, aiming for a post-money valuation of $1.4 billion. Market conditions led to this change, with plans to invest proceeds in a new facility, R&D, and marketing. The startup reported a 21% sales increase in 2024 but still incurred a net loss of $67.8 million.

Key points

  • Ather Energy cut its IPO from $375 million to $308 million due to market conditions.
  • The post-money valuation target is now set at $1.4 billion, down from previous estimates of $1.5-$2 billion.
  • Existing shareholders, including co-founders and investment firms, will sell 11.1 million shares.
  • Proceeds allocation: $108.8 million for a new electric two-wheeler facility in Maharashtra, $88 million for R&D, $35.2 million for marketing, and $4.7 million to repay borrowings.
  • Sales increased by 21% in 2024, with a market share of 10.7% but a net loss of $67.8 million.
  • Ola Electric, Ather's competitor, went public last year with significant initial success, but its share price has since dropped by 42%.

Why it matters

  • The decrease in IPO size reflects broader market volatility affecting tech and EV startups globally.
  • The Indian EV market is rapidly evolving, with Ather and Ola Electric representing key players in the industry.
  • This development highlights the difficulties faced by startups in achieving expected valuations and navigating investor sentiments.
  • Post-2025, the growth in EV adoption will likely intensify, making this IPO a crucial indicator for future investments in the sector.

Ather Energy's reduced IPO reflects the challenges in today's market but also underscores the potential for growth in India's electric vehicle sector as it aims to expand and innovate despite financial hurdles.