Ather’s IPO brings Rs 530 Cr ESOP opportunity for employees

Electric two-wheeler maker Ather Energy will open its initial public offering (IPO) for subscription from April 28 to April 30. The IPO will benefit both the selling shareholders and employees holding (ESOPs).

While investors and promoters are set to offload Rs 530 crore worth of shares in the offer for sale, employees have to wait for some time (ranging from a few months to a year) to sell their holdings.

According to Ather’s red herring prospectus, the firm’s total ESOP (employee stock options) pool stands at 16.23 million. At the upper price band of Rs 321 stated in the RHP, Ather's total outstanding ESOPs would be valued at around Rs 530 crore (approximately $62 million). 

Notably, the company has issued 4.6 million employee stock options between the start of FY25 and the date of filing the RHP.

Ather Energy's proposed public listing has a total issue size of Rs 2,980.7 crore, comprising a fresh issue of Rs 2,626 crore and an offer for sale amounting to Rs 354.76 crore.

For the fresh issue, investors can bid for a minimum of one lot comprising 46 shares, requiring an initial investment of at least Rs 13,984. As a book-built issue, 75% of the offer is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 10% for retail investors.

In the offer-for-sale segment, Tiger Global plans to offload 4,00,000 equity shares, which it had acquired at an average price of Rs 38.58 per share, yielding an impressive 8.3X return on its investment. Meanwhile, Caladium Investment is expected to secure a return of 57%.

In the first nine months of FY25, the company sold 1,08,000 vehicles, generating revenue of Rs 1,578.9 crore. However, it posted a loss of Rs 579.6 crore during the same period. For the fiscal year ending March 2024, the company reported revenue of Rs 1,753 crore with a loss of Rs 1,062 crore.