Ather Energy Eyes Growth with Focus on Capital Efficiency Ahead of IPO

Tarun Mehta Emphasizes ‘Capex Light’ Strategy Ahead of Public Listing

Ather Energy, one of India’s leading electric two-wheeler manufacturers, is preparing to go public with a strong focus on capital efficiency and operational agility, according to co-founder Tarun Mehta. In a press briefing held on April 23, Mehta outlined the company’s “capex-light” philosophy and partner-led growth model as it braces for its Rs 2,981 crore initial public offering (IPO) later this month.

Mehta emphasized that Ather has always steered clear of large capital expenditures, choosing instead to maintain agility in a rapidly evolving electric vehicle (EV) industry. “We don’t want to lock ourselves into large capex decisions that reduce our flexibility,” he noted.

Highlights:

• Ather Energy adopts a capex-light strategy to preserve agility in the fast-moving EV sector.

• Focus on capital efficiency since inception, avoiding heavy infrastructure investments.

• IPO scheduled for May 6 with subscription opening from April 28–30.

Partner-Led Model and In-House Design Enable Cost Control

Ather’s operational strategy hinges on outsourcing production while retaining control over design and supply chains. According to Mehta, nearly 80% of the hardware and electronics on Ather scooters are designed in-house, including battery management systems, dashboards, and motor controllers. The actual production, however, is executed by third-party vendors, allowing the company to avoid large manufacturing-related capex.

Additionally, Ather operates through a dealer- and franchise-based retail model, which eliminates the need to invest in company-owned stores, further reducing capital burdens.

Highlights:

• 80% of Ather’s hardware and electronics are in-house IP.

• Manufacturing is vendor-led while design and supplier control remains with Ather.

• Franchise-based dealership model reduces retail infrastructure capex.

Operational Turnaround: Sales Surge and Margin Expansion

While Ather Energy had posted losses in previous years, Mehta revealed that the company has now turned a corner, witnessing significant growth in sales and profitability metrics. In the quarter ending December 2024, unit sales jumped nearly 45%, rising from 74,000 to 108,000 units year-on-year.

The company also reported substantial improvement in gross margins, which nearly doubled from 9% in December 2023 to 19% in December 2024. This performance was attributed to multiple factors, including cost reduction efforts, robust software monetization, and the success of the Ather Resta model.

Highlights:

• December 2024 quarter saw 45% year-on-year volume growth.

• Unit sales rose to 108,000 from 74,000 a year earlier.

• Adjusted gross margins improved from 9% to 19% year-on-year.

IPO Details: Fresh Issue and Limited Offer for Sale

Ather Energy’s IPO marks the first mainboard listing of the 2025–26 financial year and is set to debut on May 6. The public offering will comprise a fresh issue of equity shares worth Rs 2,626 crore and an Offer for Sale (OFS) of 1.1 crore shares by existing shareholders.

The company has set a price band of Rs 304-321 per share, and the issue will remain open for public subscription from April 28 to April 30. Anchor investor bidding is scheduled for April 25.

Management clarified that the OFS component is limited to just 12% of the total issue, indicating strong conviction among shareholders in Ather’s long-term prospects. The reduction in OFS size was a deliberate move as existing investors preferred to retain their stakes, reflecting confidence in future growth.

Highlights:

• IPO includes Rs 2,626 crore fresh issue and 1.1 crore share OFS.

• Public subscription window: April 28–30; anchor bidding: April 25.

• OFS trimmed to 12% due to strong shareholder confidence.

Industry Context and Future Outlook

As the EV market in India matures and competition intensifies, Ather’s lean approach to capital deployment sets it apart from peers investing heavily in infrastructure. With in-house IP, strong supply chain control, and a flexible retail model, the company positions itself to scale efficiently without compromising agility.

Backed by strong government incentives, increasing consumer acceptance of EVs, and ongoing policy support, Ather Energy is gearing up to capitalize on the growing demand in the two-wheeler electric segment. The company’s focus on innovation, efficiency, and asset-light growth makes it a standout player as it enters the public markets.

Highlights:

• Ather’s model offers scalability without heavy asset deployment.

• EV policy support and rising consumer demand provide tailwinds.

• IPO to test investor appetite for asset-light EV manufacturing models.