Ather IPO: Founders, Tiger Global, Binny Bansal's 3 State Ventures to sell stake; Hero Motocorp to stay invested

Ather Energy

Electric two-wheeler maker Ather Energy is gearing up for its much-anticipated IPO. However, in a notable move, the company's promoter, Hero MotoCorp, has decided not to sell any of its shares during the offering while the founders and some of its investors are looking to divest shares, as per the company’s DRHP filed on September 9.

The firm announced that it plans to go public with an initial public offering (IPO), which will include a fresh issue of shares worth Rs 3,100 crore and an offer for sale (OFS) of up to 2.2 crore equity shares.

Under the OFS, the firm’s founders Tarun Sanjay Mehta and Swapnil Babanlal Jain are said to offload around 1 million equity shares in the company.

Caladium Investment Pte Ltd,  an affiliate of Singapore's GIC, National Investment and Infrastructure Fund II and 3State Ventures Pte Ltd and Tiger Global’s Internet Fund III are among the corporate selling shareholders.

The company’s largest shareholder Hero Motocorp has decided to hold its stake in the company.

Industry experts say that there could be multiple reasons for Hero to hold on to its stake and one could be the company's long-term bet on Ather and to hold controlling stake post-IPO.

"There could be multiple reasons and we need to wait and watch till the firm files its RHP papers, however, 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 the share price. Also this shows Hero's bet on this segment," an industry source said.

GIC Ventures will offload around 10.5 million equity shares or 47.8 percent of the total offer for sale (OFS) and 3 States Ventures will offload 4.8 million shares or 2.18 PERCENT of the offer for sale. Tiger Global will offload around 4 million shares or 18 percent of the offer for sale.

Other selling shareholders include IIT Madras incubation Cell, IIT Madras Rural Technology, and Business Incubator.

Snapshot of Ather’s Shareholding

Hero MotoCorp is the company’s largest shareholder with 37.2 percent followed by GIC (Caladium Investment) and India-Japan fund hold 15.04 percent and 10.29 percent, respectively.

The India-Japan Fund is represented by NIIF and it separately holds around 6.60 percent.
The company’s cofounders Tarun Sanjay Mehta and Swapnil Babanlal Jain hold 6.63 percent each. Tiger Global holds around 6.39 percent shares.

Ather’s IPO

The firm has said that the funds raised from the IPO’s fresh issue will be allocated to capital expenditures for establishing a new electric two-wheeler manufacturing facility in Maharashtra, India, and will also support ongoing research and development efforts.

Axis Capital and JM Financial have been appointed as the book-running lead managers for the offering while Link Intime India Pvt Ltd is the official registrar to the issue.