Ather Energy, an innovative force in India’s electric vehicle (EV) sector, has officially entered the nation’s coveted unicorn club, an achievement underscored by a $71 million funding round led by the National Investment and Infrastructure Fund (NIIF). This significant investment catapults Ather’s valuation to a remarkable $1.3 billion, solidifying its position as a major player in the rapidly evolving EV landscape. Joining the ranks of other recent Indian unicorns such as Rapido, Krutim AI, and Perfios, Ather’s rise is emblematic of the robust potential within India’s burgeoning startup ecosystem.
Founded in 2013 by IIT Madras alumni Tarun Mehta and Swapnil Jain, Ather Energy has steadily carved out a niche in the competitive EV market. Its flagship product, the Ather 450 series, has garnered widespread acclaim for its superior performance and cutting-edge design. However, Ather’s ambition extends beyond manufacturing; the company has also developed a proprietary charging infrastructure, Ather Grid, which enhances the customer experience with a growing network of fast-charging stations across India. This comprehensive approach, including its involvement in electric power storage, distribution, and management, positions Ather as a holistic provider of electric mobility solutions.
Strategic investments have been a crucial driver of Ather’s growth. Notably, Hero MotoCorp, a key player in the traditional automotive sector, has backed Ather’s vision, participating in its Series E funding round that raised $128 million. The latest infusion of capital from NIIF further strengthens Ather’s financial base, enabling the company to scale its operations and expand its market footprint. Yet, this growth has not been without its challenges, as Ather competes head-to-head with formidable rivals like Ola Electric and TVS Motor.
Despite its strides, Ather’s financial performance in the fiscal year ending March 31, 2024, presents a complex picture. The company reported a turnover of INR 1,753.8 crore, a slight 1.5% decline from the previous fiscal year. This dip stands in stark contrast to the exceptional 336% year-on-year growth witnessed in FY23, where turnover surged from INR 408.5 crore in FY22 to INR 1,780.9 crore. Intriguingly, the decline occurred despite a substantial increase in vehicle registrations, which rose to 1.09 lakh units in FY24, up from 76,941 units in FY23. This paradox of rising sales and declining turnover highlights the intricate balancing act Ather faces as it pursues aggressive growth while grappling with profitability. The company’s net loss, which escalated by over 150% year-on-year to INR 864.5 crore in FY23, further underscores these challenges.
Ather’s response to these financial headwinds is a bold expansion strategy. The company is poised to establish a new manufacturing facility in Maharashtra, an investment exceeding INR 2,000 crore. This state-of-the-art plant will have the capacity to produce up to 1 million vehicles and battery packs annually, significantly enhancing Ather’s production capabilities. Currently, Ather’s operations are concentrated in two assembly plants located in Hosur, Tamil Nadu, with a combined capacity of 450,000 vehicles per year. However, actual production hovers around 150,000 units annually, indicating considerable room for growth.
Looking to the future, Ather Energy is preparing for a public listing by the end of 2024, aiming for a valuation of approximately $2 billion. To navigate the complexities of the IPO process, Ather has enlisted the expertise of global financial powerhouses HSBC, Nomura, and JPMorgan Chase.
Ather Energy’s journey from a startup to a unicorn is a testament to its resilience and vision in a fiercely competitive market. While the road ahead is fraught with financial challenges, Ather’s strategic investments, robust expansion plans, and commitment to innovation position it well to capitalize on the surging demand for electric vehicles in India and beyond. As the company gears up for its IPO and further cements its market presence, Ather Energy is not just riding the wave of electric mobility—it is helping to shape the future of transportation in India.
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