Ather Energy Likely To Reduce IPO Size Amid Market Uncertainty

EV maker Ather Energy is reportedly mulling cutting its IPO size by at least $50 Mn (about INR 430 Cr) from its earlier target of $400 Mn (about INR 3,460 Cr) amid the ongoing volatility in the Indian and the global stock markets.

Citing sources, Bloomberg reported that the company’s shareholders are considering offering a lower number of shares under the offer-for-sale component of the IPO.

The company’s proposed public issue, which received SEBI’s nod at the end of December last year, was to have a fresh issue of shares worth up to INR 3,100 Cr (about $358 Mn) and an offer for sale (OFS) of up to 2.2 Cr shares.

Institutional investors like Tiger Global, Caladium Investments, National Investment and Infrastructure Fund (NIIF), along with Ather’s cofounders Tarun Mehta and Swapnil Jain, were slated to offload shares as part of the IPO. 

Interestingly, Hero MotoCorp, Ather’s largest stakeholder with a 37.2% stake, has no plans to reduce its stake in the EV unicorn. 

High Speculations Over Ather IPO

The ongoing turmoil and negative investor sentiment in the global equities markets seems to have forced the shareholders of Ather to reconsider the quantum of their share sale. Ather didn’t respond to Inc42’s queries regarding the reduction in the OFS component till the time of publishing this story. 

Sources also told Bloomberg that Ather will look to file for its IPO in the upcoming weeks. Earlier, it was reported that the company planned to launch its public issue in the first half of April, with a potential valuation of around $1.6 Bn.

The market turmoil might also result in Ather seeking a lower valuation for the IPO, the report added without giving exact figures. A separate CNBC report, citing sources, said that the IPO will value Ather at $1.4 Bn.

It is pertinent to mention that Ather entered the unicorn club after its last private funding round, when it raised $71 Mn from NIIF at a post-money valuation of $1.3 Bn in September. 

The speculations over the company’s IPO valuation have ranged from $1.4 Bn to $2.5 Bn since it filed its IPO papers.

Negative Investor Sentiment Affects IPO Plans

The Indian equity market has been volatile owing to negative investor sentiment over the last few months. As if concerns over high valuations were not enough, the US’ decision to impose tariffs on almost all the countries across the globe have spooked investors and ignited fears of a global trade war.

As a result, the Indian benchmark indices have slumped nearly 6% year to date. This downturn coincided with Ather getting SEBI’s nod for its public issue.

The market turmoil has also led to an over 40% decline in the share prices of Ather’s listed archrival Ola Electric.