[TusharK]

According to media reports, Bangalore-based electric 2-wheeler maker, Ather Energy, plans to file its draft prospectus for an IPO next week. The company is said to be targeting a valuation of US$ 2–2.5 billion.



Ather Energy is looking to raise Rs 3,500-4,000 crore through the IPO, comprising a fresh issue and an offer for sale by existing shareholders. Some of the funds raised through the IPO will be used to expand production capacity.

Reports also suggest that Ather Energy has engaged investment banks HSBC, JPMorgan, Axis Capital, JM Financial, and Nomura to manage the IPO.

Although Ather Energy hasn’t confirmed these reports, the news comes exactly a month following the successful listing of Ola Electric, which raised Rs 6,146 crore at a valuation of US$ 4 billion.

Source: ET Auto

Link to Team-BHP News

[SmartCat]

https://economictimes.indiatimes.com.../112043931.cms

- Losses are almost equal to its revenues
- Losses are increasing every year

Based on the above & also on Ola Electric stock price action post-listing, I think it is a strong BUY.

[whitewing]

Originally Posted by SmartCat

- Losses are almost equal to its revenues
- Losses are increasing every year

Based on the above & also on Ola Electric stock price action post-listing, I think it is a strong BUY.

Advice coming from the in-house expert may end up being taken - literally

Time we have the upturned smiley emoji.

[sapien]

Originally Posted by SmartCat

https://economictimes.indiatimes.com.../112043931.cms

- Losses are almost equal to its revenues
- Losses are increasing every year

Based on the above & also on Ola Electric stock price action post-listing, I think it is a strong BUY.

Originally Posted by whitewing

Advice coming from the in-house expert may end up being taken - literally

Time we have the upturned smiley emoji.

One can miss the sarcasm in this. I re-read the post twice! Maybe replace BUY with BYE

But what about OLA, please share your insights Smartcat.

[SmartCat]

Originally Posted by whitewing

may end up being taken - literally

Originally Posted by sapien

One can miss the sarcasm in this.

Standard disclaimer:

But what about OLA, please share your insights

Investments in Ola Electric, Ather Energy, Zomato, PayTM, CarTrade etc are more suitable for private equity investors, rather than stock market investors. To invest in these companies, you need to make certain assumptions. For eg:

- Electric 2W had a marketshare of 0.1% 5 years ago. Now it is at 6.6%. In the next 10 years, Electric 2W will have 60% marketshare.
- Ola has 30% marketshare in electric 2W market now. In the year 2035, it will maintain a market share of 20%
- Ola/Ather will diversify into electric motorbikes, 3W, cars, CV and still be successful.
- Enter these assumptions into Microsoft Excel and estimate the likely revenues & profits of Ola/Ather in the year 2035.
- Use Discounted Cash Flow (DCF) method to arrive at current fair value.

Basically, to invest in such companies, you need to have the ability to:

[dextor]

Ather is the most innovative 2W EV brand of India and the products speaks about the quality. But I believe once Honda comes with Activa EV, it might be a very challenging time for Indian EV companies. Honda has lot of money, manufacturing prowess, Sales and Services in very nook and corner.

Any thoughts on this?

[Mad Max]

Originally Posted by dextor

Ather is the most innovative 2W EV brand of India and the products speaks about the quality. But I believe once Honda comes with Activa EV, it might be a very challenging time for Indian EV companies. Honda has lot of money, manufacturing prowess, Sales and Services in very nook and corner.

Any thoughts on this?

If they take it as seriously as they are taking their passenger car unit, then these companies have nothing to worry about.

[SmartCat]

Originally Posted by dextor

Ather is the most innovative 2W EV brand of India and the products speaks about the quality. But I believe once Honda comes with Activa EV, it might be a very challenging time for Indian EV companies. Honda has lot of money, manufacturing prowess, Sales and Services in very nook and corner.

Honda/Suzuki/Yamaha bringing in 2W EVs is indeed a risk to growth of Ather/Ola. And so is TVS/Bajaj/Hero introducing more models as the segment continues to expand.

But if you are bullish on Ather because of its innovativeness & product quality, it is far safer to buy Hero Motocorp stock. That's because their pre-IPO shareholding in Ather Energy was 40% plus. If Ather stock goes 10x from here, Hero Motocorp might go up 5x. Conversely, if Ather Energy stumbles & fails, Hero Motocorp stock might just stay flat.

[anandhsub]

Originally Posted by SmartCat

That's because their pre-IPO shareholding in Ather Energy was 40% plus. If Ather stock goes 10x from here, Hero Motocorp might go up 5x.

The investment in Ather is < 5% of Hero valuation

Won't the negative impact on ICE bikes matter more, particularly if it is Ola and not Ather that gets the largest chunk of the pie?

[SmartCat]

Originally Posted by anandhsub

The investment in Ather is < 5% of Hero valuation

You are right. It will probably be less than 10% now that Hero Moto stock has doubled in the past 12 months.



Ather Energy valuation: $4 billion or Rs. 34,000 cr
Hero Moto's share @ 40% (will be diluted post-IPO) = Rs. 13,500 cr

Won't the negative impact on ICE bikes matter more, particularly if it is Ola and not Ather that gets the largest chunk of the pie?

1) Over the next decade, we have to assume that pie (overall 2W sales) will grow too, say at around 8% pa. So the worst case scenario for ICE 2W is flat sales (zero growth) over the next decade.

2) If one assumes that ICE 2W sales will actually shrink over the next decade, then Hero Moto's Vida brand will do well. It registered a not-too-shabby 6,000 units sales in Aug 2024, which are good numbers for a latecomer.

3) Automotive companies draw their strength from number of dealer networks & its reach. If it is really armageddon for 2W ICE sales, then Hero Moto will sell Electric 2W at traditional Hero Moto dealerships, thereby boosting its sales.

[whitewing]

Originally Posted by anandhsub

Won't the negative impact on ICE bikes matter more, particularly if it is Ola and not Ather that gets the largest chunk of the pie?

Originally Posted by SmartCat

1) Over the next decade, we have to assume that pie (overall 2W sales) will grow too, say at around 8% pa. So the worst case scenario for ICE 2W is flat sales (zero growth) over the next decade.

Add to that - the large 2wheeler manufacturers export significant numbers to other 3rd world countries (with Bajaj being the leader I think).
For the mid term, a shrinking domestic ICE market is very likely offset by exports to countries in Africa and Latin America where electricity infrastructure is likely to be patchy and are price sensitive.

[PreludeSH]

2W EV market should be growing well since the charging network is not a main concern. Only mainstream 2W manufacturers coming into EV space should impact the newer ones given their expertise, network etc

[TusharK]

Ather Energy to go public; Receives SEBI nod for IPO

Bangalore-based electric scooter maker Ather Energy has received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO).



According to the draft red herring prospectus, the proposed IPO includes fresh equity shares worth up to Rs 3,100 crore and an offer for sale of up to 2.2 crore equity shares by existing shareholders. The company has set a valuation target of US$ 2-2.25 billion.

The company says the proceeds from the fresh issue will be used to set up an electric 2-wheeler manufacturing unit in Maharashtra. It will help fund research and development and will also be utilised for marketing and the repayment of borrowings.

Ather Energy will be the second EV maker in India to go public, after Ola Electric. Hero MotoCorp, which has a 37.2% stake in the company, will not sell shares in the IPO.

Source: ET Auto

Link to Team-BHP news

[The_Apex]

Ather has a strong R&D base and i hope this IPO will boost their capability further despite reported negative cashflows.

The only thing I observed is the product portfolio lacks the diversity compared to OLA in terms of future vision and product platforms. Also they are bit conservative in terms of marketing their future initiatives unlike OLA.

450 has been a great performer for the company and last time I checked with Ather space bhubaneswar, they told us that they are facing a bit of issues with rizta but still rizta is having over month to 3 months waiting period.

So that shows the brand image is great, and if they can work a bit more in publishing future ventures, that would attract more investors.

[sunilarkt]

So Hero will become majority owner of the company just like that!!! I hope they keep the brand seperate from Hero.