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Indian EV startup Ather cuts IPO size due to market conditions
Ather Energy, an Indian EV startup, has reduced the size of its initial public offering (IPO) by 18% to 26.26 billion Indian rupees (US$308.3 million).
The company is now targeting a post-money valuation of US$1.4 billion, down from the previous target range of US$1.5 billion to US$2 billion.
This change is due to current market conditions.
The IPO will open on April 28, with anchor investors participating on April 25.
The revised plan shows that existing shareholders will sell 11.1 million shares, down from the initial 22 million shares.
Co-founders Tarun Mehta and Swapnil Jain, along with NIIF and Tiger Global, will offload their stakes.
🔗 Source: TechCrunch
🧠 Food for thought
1️⃣ Divergent business models reveal strategic bets in India’s EV landscape
Ather and market leader Ola Electric represent fundamentally different approaches to the EV market, offering a case study in strategic alternatives.
Ather operates an asset-light model that outsources battery production (which constitutes about 50% of an EV’s manufacturing cost) while focusing on premium product offerings and quality 1.
In contrast, Ola Electric has invested heavily in vertical integration, manufacturing key components in-house, including battery cells, reflecting its mass-market approach 1.
Ather’s decision to avoid battery manufacturing is viewed positively by some analysts given the complexities and capital intensity involved, with the company allocating 6.6% of operational revenue to R&D compared to Ola’s 7.69% 2.
This strategic difference is reflected in their financial profiles: Ather has maintained a significantly lower cash burn rate compared to Ola Electric’s cumulative cash burn of $538 million, suggesting better capital efficiency despite its smaller market footprint 2.
The choice between vertical integration versus specialization represents a classic strategic trade-off in emerging industries, where different bets on the future value chain can lead to dramatically different outcomes.
