Hey folks,
It’s Saturday — which means it’s time for your weekly wrap-up and the markets story! So first, here’s a quick recap of what we wrote over the week…
On Monday, we unpacked whether the big bet on appliance subscriptions could be viable in India. Tuesday’s story explored why some investors are pulling out of US assets and why it’s not as simple as it seems. Wednesday’s story explained why Devyani International wants a seat at the biryani banquet. Thursday’s piece broke down why MTNL’s rescue is stuck in a limbo. And our Friday story told you how dinosaur fossils have become luxury collectibles and why that’s bad news for science.
And with that out of the way, let’s now dive into today’s markets story about the upcoming mainboard IPO.
The Ather Energy IPO is here!
In today’s Finshots, we break down why this electric two-wheeler startup is taking its shot at the public markets — and why its biggest challenge isn’t building scooters, but selling the dream.
The Story
India runs on two wheels. Be it a humble bicycle, a scooter weaving through traffic or even the animal cart in rural lanes — two-wheelers are everywhere. And honestly, it makes sense. They’re cheaper than cars, easier to maintain and most importantly, they’re perfect for Indian roads. You can zip through narrow lanes, park in a pinch and get to your destination quicker than the guy in a SUV stuck at a signal.
So, it’s no surprise that India is the world’s biggest 2-wheeler market, selling 18.4 million units in FY24. And with the rise of electric two-wheelers (E2Ws) offering more features, cleaner emissions and government subsidies, the momentum is only growing.
Take my brother for instance. He debated for months between a petrol scooter (also called internal combustion engine/ICE vehicles) and an EV. And although he initially leaned toward petrol, he ended up with an EV — all because it was flashier, feature-rich and easier to charge.
And that’s where Ather Energy — the homegrown electric scooter brand started by IIT grads Tarun Mehta and Swapnil Jain, rolls in.
You see, Ather isn’t your average EV company. It’s not just building two-wheelers. It’s trying to build a brand. And that… is much harder than it looks. When it launched the Ather 450 in 2018, it introduced India’s first E2W with a top speed of 80 kmph (kilometres per hour) — comparable to ICE scooters at the time. It was also the first to offer connected features and cloud integration via a 3G SIM card in an E2W. So yeah, it’s never gone the cheap-and-cheerful Ola or Hero route but has wanted to be the “Apple of scooters”. Clean design. High-tech dashboard. Smart connectivity. Premium feel.
And now, the E2W maker is gearing up for a ₹2,980 crore IPO that’s set to hit the markets on April 28th. Roughly 12% or ₹354 crore of that is an Offer for Sale (OFS) and the rest (₹2,626 crore) is a fresh issue or money that’s meant to scale up operations growth, reduce debt and hold ground in a brutal EV price war.
But here’s the thing. You don’t build an Apple-like brand without burning cash. And Ather’s burn has been intense. Losses? ₹1,062 crores in FY24. Total accumulated losses between FY22-24? ₹2,200+ crores. Unit economics? Still shaky as it loses money on every scooter it sells.
And unit economics in the world of E2Ws is everything. And to make money on each one you sell. And you need scale, cost control and clever engineering. The idea is to sell more scooters, improve your cost per unit and eventually turn profitable, which is what Ather seems to be working on.
In FY24, it slashed the bill of materials for its scooters by 20% to 30% by building more things in-house like motor controllers (51% cheaper) and belt drives (16% savings). And now, it’s doubling down with ₹927 crores from the IPO going into a new automated factory, ₹750 crore for R&D — including cheaper LFP (lithium iron phosphate) battery tech and ₹40 crores to repay debt. So yeah, Ather knows that better unit economics = survival in a price sensitive market like India.
But here’s the thing. Ather’s high costs aren’t because people hate the product. In fact, its customer satisfaction scores are good and its scooters even scored higher than Ola in industry-wide surveys.
So the problem? Well, volume.
You see, EVs are a scale game. You turn profitable only when you sell a lot. And despite strong brand love, Ather is selling just a fraction of what Ola and TVS are moving. For context, Ola Electric’s EV sales in FY24 were over 3.2 lakh (35% market share). For TVS it was 1.8 lakh+ (19% share). Ather? About 1.1 lakh (11.5% market share).
But then maybe that’s what Ather is positioning it as.
Unlike others, Ather’s playing in a narrower lane — targeting urban, tech-savvy customers with premium scooters. That means fewer models, fewer price points and a limited dealer network. Also, while others aggressively launched entry-level models to chase volume, Ather’s focus was more on innovation than distribution. So it’s easy to see why mass adoption hasn’t followed brand love.
But that’s not all. You see, in an industry where government subsidies are critical, Ather took a huge hit last year when FAME-II subsidies were slashed. It had to cut prices, eat up the cost difference and still try to keep customers happy. And that dented margins.
So why go public now, you ask?
Well, Ather’s IPO isn’t just about capital. It’s about credibility. You see, the EV space is getting crowded. Ola is already public. Bajaj and TVS are flooding the market with models. And now Hero MotoCorp, Ather’s own investor, is gunning for the EV pie too.
So Ather needs more than just money. It needs “mindshare”. It wants to be known as the tech-savvy, premium EV brand that can move toe-to-toe with the big boys. And listing could give it that legitimacy. In fact, of the total IPO proceeds, the company is looking to utilise ₹300 crores towards marketing spends to help increase its brand awareness.
And there’s even the infrastructure moat. Everyone talks about e-scooters. But Ather’s hidden ace? Its charging network – Ather Grid, which has over 2,500 fast-charging stations in over 300 cities. Add to that its cross-access with Hero MotoCorp chargers (through a tie-up), Ather Duo (its portable charger), and its ‘neighbourhood chargers’ compatible with 3 and 4 wheelers, and you could see how Ather owns a huge infrastructure in the EV space. So, with the IPO funds and awareness, it could be a platform play, kind of like what Tesla did in the US. If it can license access or get state EV policy backing, it could unlock new revenue lines.
So yeah, Ather is quietly building the rails. And in the EV game, owning the infrastructure could be a long-term moat.
But let’s be real. Ather’s not profitable.
Sure, its revenues are growing. It made ₹1,617 crores in the first three quarters in FY25, up from ₹1,254 crores for the same period in FY24. And gross margins are improving, even if bottom lines are bleeding. Adjusted gross margins stood at 9% for FY24 and improved further to 19% in the first nine months of FY25.
That does sound promising until you peek at the bottom line. Losses have kept rising since FY22. And the EBITDA margin, while improving, is a steep negative reflecting the high cost structure and scaling challenges.
So yeah, it’ll need to fight hard for market share, possibly burn more cash, and spend big on product R&D. And anyone looking to bet on Ather should know that this is a long-term EV play and not a quick-flip IPO.
The price band for IPO is set at ₹304-₹321 per share. And that might seem pricier to many for a company that’s bleeding losses and has no returns on net worth. Plus, it has slashed its IPO valuation by 30% due to market conditions… which makes you ask ― if the business has big potential, why settle for less?
Sure, investors are often willing to pay up for a brand with strong tech, IP and a differentiated positioning in the high-growth EV space. But at the end of the day, it’s the numbers that drive business and valuations that drive returns, yeah?
So if you’re looking for a consistent cash flow machine, this ain’t it (yet). But if you believe India’s EV story won’t just be about low-cost scooters and that there’s space for sleek, tech-packed, premium rides; Ather’s prospectus might just be worth a closer look.
Until next time…
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