IPO-bound Ather Energy is 'capex light' to retain 'agility', says co-founder Tarun Mehta

“Battery management systems, motor controllers, dashboards—all of that is our IP. But the actual production is done by vendors. We retain design control, supplier control, and hence, cost control.”

IPO-bound electric two-wheeler manufacturer Ather Energy is betting on capital efficiency and strategic partnerships to power its growth at a time when the mobility business is evolving rapidly.

Speaking at a press briefing regarding their public offering, Tarun Mehta, MD and Co-founder of Ather Energy said on April 23 that they are not looking to lock themselves up in large capex decisions. “Since day one, we’ve been very focused on capital efficiency,” said Mehta. “We don’t want to lose our agility or our flexibility. The EV industry is moving very fast, and we don’t want to lock ourselves into large capex decisions that reduce that flexibility,” he added.

Mehta said Ather is relying on a partner-led model for production and retail. “Our stores are dealer-operated, franchise-operated. We don’t largely run our own stores, which keeps our capex light compared to other brands.”

He added that 80% of the hardware and electronics onboard the vehicle is designed in-house. “Battery management systems, motor controllers, dashboards—all of that is our IP. But the actual production is done by vendors. We retain design control, supplier control, and hence, cost control.”

The company reported losses in the previous years, but Ather co-founder said they are now seeing a turnaround. “We have recorded an almost 45% volume growth in the quarter ending December 2024 compared to the same period last year,” Mehta said, noting that unit sales have increased from 74,000 to nearly 108,000 as of December 2024.

Mehta added that while total income too has increased, ‘the real story is in the margins’. The company’s adjusted gross margins have nearly doubled from 9% in December 2023 to 19% in December 2024. The management attributes this to aggressive cost engineering, the successful launch its Ather Rizta model, and strong software sales.

Ather Energy’s IPO

This will be the first mainboard public issue of the current financial year and will list on May 6. Ather Energy has announced a price band of Rs 304-321 per equity share for its Rs 2,981 crore initial public offering (IPO), which will open for subscription between April 28-30, while the bidding for anchor investors will be held on April 25.

The IPO will include a fresh issue of equity shares worth Rs 2,626 crore and an Offer for Sale (OFS) of 1.1 crore equity shares by promoters and existing shareholders.

On the smaller IPO size, the management explained the predominant part of the downsizing was a cut in the secondary sale. Only 12% of the entire issue is OFS because shareholders saw the potential for growth and chose to hold on to their shares.

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