Ather Energy’s IPO Lands Amidst Markets Jitters, But Can It Deliver Past The Losses?

In 2013, two IIT Madras alumni, Tarun Mehta and Swapnil Jain, embarked on a journey that would position them at the forefront of India's electric vehicle (EV) revolution. Their story began not in a corporate boardroom, but within the academic corridors of IIT Madras.

Their initial funding was modest but meaningful. A professor at IIT Madras, impressed by their conviction, wrote a cheque for Rs 85,000 on the spot sometime in 2013. Several other professors contributed amounts ranging from Rs 30,000 to Rs 85,000, culminating in a total of around Rs 5 lakh. An angel investor added Rs 25 lakh, and the duo secured an additional Rs 15 lakh through IIT Madras's incubation program.

That modest cheque from an IIT Madras professor marked the beginning of a journey that has now culminated in one of the most closely watched public listings in India’s EV sector.

Ather Energy’s Rs 2,981 crore initial public offering (IPO) closed this week, backed by strong anchor investor interest. The company also raised Rs 1,340 crore from anchor investors ahead of the issue.Over the years, Ather has raised around $578 million (approximately Rs 4,800 crore) in funding from a mix of marquee investors. Among them: Hero MotoCorp, which came on board in 2016 and remains the largest shareholder today, along with Caladium Investment and the National Investment and Infrastructure Fund. The co-founders—Tarun Mehta and Swapnil Jain—continue to be promoter shareholders, holding 5.5% each, while Hero MotoCorp owns 33.1%.

Notably, Hero MotoCorp hasn’t offloaded any shares in the IPO. Although Hero's continued stake might suggest tight integration with operations and manufacturing, the reality is quite different.

“We are a strong tech-led scooter company, starting with an urban OEM mindset. Their (Hero’s) strength lies in motorbikes, mass, rural, et cetera. So different strengths, different worldviews, different approaches to building the business,” Ravneet Singh Phokela, chief business officer at Ather Energy, told The Core in an interview.

According to Phokela, Hero’s early backing didn’t change Ather’s product or supply strategy — but it did bring credibility. “When Hero, which is the largest two-wheeler manufacturer in the world, invested, it just told stakeholders—hey, listen, we have to take this company seriously.”

Still, analysts say Ather’s IPO is more than just another EV play — it’s a stress test for India’s broader IPO appetite. After a red-hot year in 2023, the market has cooled in recent months amid global volatility. US tariff threats have spooked export-oriented firms, while domestic two-wheeler and EV demand have been uneven.

The Numbers Under The Hood

Ather had anticipated some of these market headwinds. Ahead of the issue, the company trimmed the size of its IPO by 18% to Rs 2,626 crore, down from its earlier target of around Rs 3,200 crore, according to a revised prospectus. It also revised its valuation expectations downward — settling for a post-money valuation of $1.4 billion, compared to the $1.5–$2 billion range it had initially been aiming for.

Even with this recalibration, concerns around valuation haven’t entirely eased. In its IPO note, Geojit Financial Services wrote, “At the upper price band of Rs 321, Ather’s EV/Sales ratio of 7.1x (FY24) appears expensive. However, as a pioneer in the E2W segment and in a strong growth phase, we recommend a ‘Subscribe’ rating for high-risk investors with a long-term view.”

Ather reported a net loss of Rs 1,059.7 crore in FY24, up from Rs 864.5 crore in FY23 and Rs 344.1 crore in FY22. For the nine months ending December 2024, losses stood at Rs 577.9 crore. That’s despite a sharp revenue jump—from Rs 408.9 crore in FY22 to Rs 1,753.8 crore in FY24.

So why the losses?

According to the RHP, the company’s cost structure is still frontloaded with high spends on materials, R&D, and distribution. In FY24, total expenses reached Rs 2,674.2 crore, outpacing revenue by more than 50%. Material costs alone made up around 59% of total expenses, with electronics and battery packs accounting for the bulk of Ather’s bill of materials.

Ather currently operates its manufacturing facility in Hosur, Tamil Nadu, which has an installed annual capacity of 4.2 lakh electric two-wheelers (E2Ws) and 3.8 lakh battery packs as of December 2024. Despite this, its capacity utilisation stood at just 39% for vehicles and 41% for battery packs in the nine months ending December 2024, constrained largely by demand volatility and battery production capacity.

​Ather Energy's market share in India's electric two-wheeler segment has been on the rise. In Q4 FY2025, the company's market share increased from approximately 11% in Q3 to 15%, driven mostly by its family-friendly Rizta model. In March 2025, Ather sold 15,446 units, capturing a 12% market share and ranking fourth in the segment. In comparison, Ola Electric led the market with 3,44,004 units sold in FY2025, holding a 30% market share. TVS Motor Company followed with a 19% share, and Bajaj Auto held a 17% share

How Ather Is Building Differently

On the sales front, Ather’s expansion map was shaped not by geography, but by product-market fit. Early scooters like the 450 catered to performance enthusiasts, most of whom were concentrated in South India. Only with the 2024 launch of the more mass-market Rizta did Ather aggressively expand into North and West India.

“We didn’t go to the South first because it was home turf. We went because performance scooters make up 19% of the market there,” Phokela said. “North and West are convenience and commuter scooter markets, which only opened up to us with Rizta.”

Ather’s strategy, from the outset, was never about following the crowd. While most OEMs leaned heavily on home charging and left public charging to third parties or startups, Ather went the other way—building its own charging network years before it launched its first scooter.

“We launched the Ather Grid before we launched the scooter. The Ather Grid was launched, I think, in June of 2018, and the scooter came in September...We’ve also worked on bringing down the capital required to install public chargers, it’s now just around Rs 65,000 per location, which is significantly lower than the several lakh rupees others spend," Phokela told The Core.

Although Ather attracted mass funding and grew steadfast in a sector with high burn rates and intense competition, Ather’s approach has been strikingly methodical — engineer first, expand second. But public markets demand more than just engineering elegance. They demand profitable scale. The company’s ability to preserve its brand premium, expand with discipline, and overcome any subsidy headwinds will now be tested in full public view. For Ather, the road ahead isn’t just about building scooters — it’s also about justifying its premium brand positioning.