Ather Energy IPO is set to raise Rs 3,100 crore with key investors like GIC and Tiger Global divesting shares.
In a significant development, Ather Energy, the electric two-wheeler manufacturer, is all set to launch its much-anticipated Initial Public Offering (IPO). Notably, one of its biggest backers, Hero MotoCorp, has decided not to divest any of its shares in the offering, while the company’s founders and other investors are preparing to offload portions of their stakes. The Draft Red Herring Prospectus (DRHP) was filed on September 9, shedding light on the details of the upcoming IPO.
Key Highlights of Ather IPO:
- IPO Details: Ather Energy plans to issue Rs 3,100 crore in fresh shares alongside a sale of 2.2 crore equity shares by existing shareholders.
- Founders’ Stake Sale: Co-founders Tarun Sanjay Mehta and Swapnil Babanlal Jain will each offload around 1 million shares.
- Prominent Investors: Key investors such as GIC and Tiger Global are set to divest substantial portions of their stakes, but Hero MotoCorp will retain its full holding.
- Hero MotoCorp’s Strategy: Hero MotoCorp holds a 37.2% stake in Ather and has chosen not to participate in the share sale, signaling a long-term commitment.
- Use of Proceeds: The raised funds will be used to establish a new manufacturing facility in Maharashtra and fuel further R&D efforts.
What We Know About Ather Energy IPO So Far
Ather Energy aims to raise Rs 3,100 crore through a fresh issue of shares, combined with an Offer for Sale (OFS) of up to 2.2 crore equity shares. Prominent investors, including the company’s co-founders Tarun Sanjay Mehta and Swapnil Babanlal Jain, will offload a portion of their holdings, along with other institutional investors like GIC, Tiger Global, and 3State Ventures.
Hero MotoCorp Retains Stake in Ather
Hero MotoCorp, Ather’s largest shareholder with a 37.2% stake, has decided to retain its shares in the upcoming IPO. Industry analysts believe this move reflects Hero’s strategic focus on electric mobility and its confidence in Ather’s future growth. Typically, when a promoter sells a significant stake during an IPO, it can send negative signals to the market. Hero’s decision to hold onto its shares seems to be aimed at maintaining confidence among investors.
An industry expert remarked, “If a promoter sells a large portion of their shares during an IPO, it could be perceived negatively by the market, potentially leading to a decline in share price. Hero’s decision shows its strong bet on this segment.”
A Closer Look at Ather’s Shareholders
Among those set to sell shares are GIC Ventures, 3State Ventures, and Tiger Global. GIC Ventures, the Singaporean investment giant, will offload approximately 10.5 million shares, which account for nearly 47.8% of the total shares in the OFS. 3State Ventures will divest 4.8 million shares, while Tiger Global is set to sell 4 million shares.
Interestingly, Hero MotoCorp’s decision to stay invested contrasts with the moves of other key shareholders. This signals that Hero is positioning itself for potential long-term benefits from Ather’s success in the electric two-wheeler segment.
Snapshot of Ather’s Current Shareholding:
– Hero MotoCorp: 37.2% (largest shareholder)
– GIC Ventures: 15.04%
– India-Japan Fund (NIIF): 10.29%
– Co-founders: Tarun Mehta and Swapnil Jain each hold 6.63%
– Tiger Global: 6.39%
Ather’s Future Plans
The funds raised through the IPO will be crucial for Ather’s next phase of expansion. The company intends to use the capital to build a new electric two-wheeler manufacturing facility in Maharashtra. This aligns with Ather’s strategy of scaling up production to meet the increasing demand for electric vehicles in India. Additionally, a portion of the funds will be directed towards bolstering Ather’s R&D capabilities, ensuring the company stays at the forefront of innovation in the EV space.
Conclusion
As Ather Energy gears up for its IPO, the company’s moves are being closely watched by industry experts and investors alike. With Hero MotoCorp signaling its confidence by retaining its stake and Ather positioning itself for significant growth, this IPO could mark a pivotal moment in the Indian electric vehicle market.
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