Ather IPO: IIT Madras To Make 40X Gains, Tiger Global To Rake In 8.3X Returns

EV major Ather Energy’s cofounders Tarun Mehta and Swapnil Jain are set to rake in 15.2X returns each by selling a portion of their shares in the company as part of offer for sale (OFS) during its IPO.

Cofounders Mehta and Jain held 2.05 Cr shares each in the company ahead of the IPO. The duo will offload 9.8 Lakh shares each in the OFS. They acquired these shares for INR 2.1 Cr each and will offload them for INR 31.4 Cr each at the upper end of the IPO price band of INR 314 to INR 321, translating to 15.2X returns on their initial investments.

Founded in 2013 as an IIT Madras incubated startup, Ather is one of the leading escooter OEMs in India. It competes with Ola Electric, Bajaj Auto, TVS Motor, Hero MotoCorp, Honda, and more. Over the years, the company raised more than $630 Mn in funding from the likes of Hero MotoCorp, National Investment and Infrastructure Fund (NIIF), Singapore-based GIC’s Caladium Investment, Zerodha’s Kamath brothers, among others.

The EV unicorn’s IPO comprised a fresh issue worth up to INR 2,626 Cr and OFS of up to 1.1 Cr shares. At the upper end of the price band, Ather is expected to raise INR 2,981 Cr from the IPO.

IIT Madras will emerge as one of the biggest gainers from the public listing. 

Two divisions of IIT Madras – IITM Incubation Cell and IITMS Rural Technology and Business Incubator – are offloading parts of their stakes via the public offering. IITMS Rural Technology and Business Incubator will offload 4,191 shares worth INR 13.45 Lakh, while it had acquired these shares for INR 34,827.21. This translates to almost 40X gains on investment.

On the other hand, the IITM Incubation Cell is offloading 31,050 shares for about INR 1 Cr. The cost of acquiring these shares was almost nil for the institution.

IITM Incubation Cell and IITMS Rural Technology and Business Incubator will continue to hold 13.4 Lakh and 1.81 Lakh shares of Ather, respectively, post the IPO. 

The next biggest gainer from the IPO will be Tiger Global. The US-based investment major, via its Internet Fund III, first invested in Ather in its Series A round in 2015. It held 1.97 Cr shares in the company ahead of the IPO.

Tiger Global is offloading 4 Lakh shares of Ather worth INR 12.84 Cr via the OFS. The cost of acquiring these shares was INR 1.54 Cr, hence making 8.3X returns on its investment.

Among the other shareholders offloading stake in Ather’s public listing are NIIF, Caladium Investment, and angel investor Amit Bhatia. 

NIIF is selling 26.34 Lakh shares for INR 84.57 Cr at the upper end of the price band, making 1.7X returns on its investment. GIC’s Caladium Investment is selling 60.03 Lakh shares worth INR 192.71 Cr, making almost 1.6X gains on its initial investment.

Bhatia will also rake in more than 1.7X returns on his investment in the company by offloading 18,531 shares as part of the OFS.

Ather’s investor and competitor Hero MotoCorp continues to hold more than 38% stake in the company, or 11.5 Cr shares. Besides the two cofounders, Hero MotoCorp is also a promoter at Ather. However, it is not selling any shares via the OFS.

In its red herring prospectus (RHP), Ather said that while all the transactions with Hero MotoCorp and Hero FinCorp have been “executed on an arm’s length basis”, it cannot guarantee that these transactions were on the most “advantageous terms” possible compared to other funding it has secured from other unrelated parties. 

“It is likely that we will engage in transactions with related parties in the future… any such future transactions following our listing will be subject to approval by our audit committee, board, or shareholders as required by the Companies Act, 2013, and the SEBI Listing Regulations…” the RHP said. 

Quick Overview Of Ather IPO

The EV unicorn filed its draft IPO papers with SEBI in September last year and was initially looking to raise more than INR 3,100 Cr via fresh issue.

The company received the nod from the market regulator for its IPO in December. After months of speculations amid geopolitical issues and market slowdown, Ather filed its RHP last month with a reduced offer size.

Its public issue was open between April 28 and April 30. However, the IPO received a lukewarm response from the market. Its public issue was oversubscribed 1.43X. This was way less compared to Ola Electric’s IPO subscription of 4.27X in August last year.

While the retail investors’ portion was oversubscribed 1.78X, the qualified institutional buyers’ (QIB) portion was oversubscribed by 70%. However, non-institutional investors’ (NIIs) portion just saw 66% subscription.

Ather’s shares are expected to list on the stock exchanges on Tuesday (May 6).

The company sold 1.26 Lakh EVs in 2024, up from 1.04 Lakh units in the previous year. In 2025, Ather’s sales have already crossed 50K units.

The company posted a net loss of INR 577.9 Cr in the nine months ended December 2024, down 26% from a loss of INR 776.4 Cr in the year-ago period. Its operating revenue jumped 28.3% to INR 1,578.9 Cr in the first three quarters of FY25 from INR 1,230.4 Cr in the corresponding period last year.

Brokerages gave mixed calls on Ather’s IPO. For instance, Bajaj Broking recommended it for the long term. “Considering its current financials, this appears to be a long-term investment story, and therefore, only well-informed investors with surplus funds and a long-term perspective may consider investing moderately,” it said.

Meanwhile, Pantomath Group’s Asit C Mehta Investment Intermediates gave an “avoid” recommendation. It said that the increasing EV focus of legacy players such as Bajaj Auto and TVS Motor is heating up the competition, creating uncertainty around the timeline of attaining profitability, even at the EBITDA level. 

“Ather Energy as a wait-and-watch strategy might be more appropriate,” it said.