E-scooter maker Ather Energy plans share sale
Swaraj Singh Dhanjal
MUMBAI: Ather Energy, one of India’s largest electric twowheeler makers, has initiated talks with investment banks to explore the possibility of going public, two people aware of the development said.
“Ather has met a few major domestic and foreign investment banks in recent weeks. These are very preliminary talks. They are trying to understand what valuations to expect if they go ahead with an IPO in the coming quarters, as early as the end of the year, but most likely in the first half of next year,” one of the people cited above said, requesting anonymity.
However, the timing of the IPO will depend on the market conditions, the person said.
Market conditions right now are especially hostile for tech IPOS, after investors burnt their fingers in stocks of money-losing companies with high cash burn rates. With looming interest rate hikes in the US, foreign investors are dumping risky assets in emerging markets and fleeing to the safety of US sovereign bonds.
However, all is not lost for companies plotting to go public, especially those with a clear path to profitability. For example, Delhivery, a tech-enabled logistics company backed by Softbank, pulled off a successful listing last month despite the overall gloom.
“Tech stocks have taken a beating in the recent market corrections caused by rising interest rates in the US and other major economies, and investors are not too excited about tech IPOS right now. But still, a few consumerfocused brands such as Ather have started engaging with banks on their IPO plans,” the first person added.
A spokesperson for Ather said the company has no plan for an IPO this year.
Last month, Ather raised $128 million in its Series E round of funding from National Investment and Infrastructure Fund Ltd’s Strategic Opportunities Fund and Hero Motocorp, which is a significant shareholder of Ather, valuing the company at a little shy of $1 billion. The company said it would use the funds to expand manufacturing facilities, invest in research and development, build charging infrastructure and grow its retail network.
Ather registered the highest ever monthly sales in April, delivering 3,779 units to customers.
Booking orders for Ather Energy’s flagship product, the Ather 450X model, are growing at 25% quarter-on-quarter, the company said in a statement announcing the fundraising. Ather Energy’s retail sales network in India comprises 38 experience centres in as many cities. It aims to expand the network to 150 such centres in 100 cities by 2023, the company, founded in 2013 by Tarun Mehta and Swapnil Jain, said.