Indian electric scooter maker Ather Energy plans to raise about $370 million in an initial public offering, according to a draft prospectus (PDF) filed on Monday, as the startup seeks to capitalize on growing demand for electric vehicles in the world's third-largest auto market.
The Bengaluru-based startup, which competes with recently listed rival Ola Electric Inc., is targeting a valuation of $1.5 billion to $2 billion, people familiar with the matter told TechCrunch. The company plans to sell new shares in the IPO as well as up to 22 million shares from existing investors.
Other Energy declined to comment.
The company said it would use the proceeds to fund a new manufacturing facility in Maharashtra, repay debt and for research and development.
Azar's planned IPO comes as government incentives and rising fuel prices are boosting India's electric vehicle market, which aims to have 30% of its personal cars and 70% of its commercial vehicles run on electricity by 2030.
India's Hero MotoCorp and Ather Energy, backed by sovereign wealth fund National Investment and Infrastructure Fund, controlled about 19% of the electric two-wheeler market as of late August, according to government data.
The startup faces stiff competition from well-funded startups and established automakers who are rushing to grab a share of India's fast-growing electric two-wheeler market. Ola Electric leads with 31% market share, followed by TVS Motor and Bajaj Auto with 20% and 19% respectively. Hero's market share is around 5%.
Incumbent automakers have stepped up efforts to boost their presence in India's EV market, with some positive results: Bajaj Auto, for example, had an 11% market share at the end of June this year.
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather is known for its in-house design approach, with 80% of its major components designed in-house. The company has raised about $500 million in several funding rounds, according to Tracxn, and reported a loss of $126 million on revenue of $213 million for the fiscal year ended March.
Axis Capital, HSBC, JM Financial and Nomura are the lead managers for Ather's IPO.