Ather Energy, an Indian electric vehicle manufacturer, is reportedly considering a reduction of at least US$50 million in its planned initial public offering (IPO) of approximately US$400 million.

This decision comes from sources familiar with the situation.

The adjustment may result from current investors offering fewer shares in the sale.

Despite fluctuations in global stock markets, Ather Energy intends to proceed with the IPO in the coming weeks.

The company may also slightly adjust its valuation during the IPO process.

If market conditions worsen, Ather Energy might explore private placement as an alternative.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ IPO timing reflects broader EV market maturation challenges

Ather Energy’s decision to potentially reduce its IPO size comes at a critical juncture for India’s electric vehicle market, where reality is catching up to early enthusiasm.

Ola Electric’s post-IPO performance serves as a cautionary tale, with its shares trading 33% below the initial offering price 1, highlighting investor concerns about profitability in the sector.

While the two-wheeler industry is projected to grow at a healthy 7-8% CAGR through 2031 with EV penetration expected to reach 35-40% 2, companies are facing increasing pressure to demonstrate sustainable business models.

Ather’s premium positioning and focus on quality has helped establish brand reputation, but its sales grew only 20% in 2024 compared to Ola Electric’s 52% growth 3, raising questions about whether premium pricing can achieve necessary scale.

This valuation recalibration reflects the broader pattern in global EV markets where companies are increasingly judged on current profitability rather than future potential.

2️⃣ The funding evolution of Indian EV startups shows maturing investor expectations

Ather Energy’s funding journey illustrates how investor appetite for Indian EV startups has evolved from initial skepticism to strategic partnerships with established players.

Recent Ather Energy developments