From Incubation To Dalal Street: IIT Madras To Pocket Rs 50 Crore From Ather Energy IPO

Bengaluru-based electric two-wheeler maker Ather Energy is set to raise Rs 2,981 crore through its initial public offering (IPO). The issue will open for public subscription on Monday, April 28, and will close on Wednesday, April 30. The offerings includes a fresh issue of 8.18 crore shares worth Rs 2,626.30 crore, and an offer for sale (OFS) component of 1.11 crore shares worth at Rs 354.76 crore.

Among the selling shareholders are two incubators from IIT Madras - IIT Madras Incubation Cell and IITM Rural Technology and Business Incubator. Ather's listing, which is scheduled for Tuesday, May 6 on both the exchanges Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), is not only a milestone for the company, but the incubators as well.

Rs 50 Crore Milestone For IIT Madras

These two IIT Madras incubators, which are situated within the campus and have a common chief executive officer (Dr Tamaswati Ghosh), collectively hold 15.58 lakh equity shares of the company or 0.52 per cent of company's equity.

IIT Madras Incubation Cell holds 13,72,860 shares (0.46 per cent) at a Nil value and IITMS Rural Technology and Business Incubator holds 1,85,310 shares (0.06 per cent) at a weighted average buying price of Rs 8.31 per share. 

At the upper limit of the issue's price band (Rs 304-321), the shares held by IIT Madras Incubation Cell are valued at Rs 44.06 crore, and the shares held by IITMS Rural Technology and Business Incubator are worth Rs 5.95 crore. Therefore, the current value of both their shares stands at Rs 50.01 crore.

Here's a simple explanation of the calculations:

1. IIT Madras Incubation Cell

Shares Owned: 13,72,860 

Buying Price: Rs 0 

Current Price (Upper Band): Rs 321 per share 

Current Market Value:

13,72,860 shares × Rs 321 = ₹Rs 44.06 crore

Since the incubator acquired the shares at nil value, the entire value is essentially profit.

2. IITMS Rural Tech Incubator

Shares Owned: 1,85,310 

Average Buying Price: Rs 8.31 per share 

Current Price (Upper Band): Rs 321 per share 

Current Market Value: 1,85,310 shares × Rs 321 = Rs 5.95 crore

Profit: 1,85,310 shares × Rs 312.69 profit per share = Rs 5.79 crore

With a mere initial investment of Rs 15.4 lakh, IITMS Rural Tech Incubator will be multiplying its investment by over 38 times.

However, the incubators are not selling all of their holdings via the IPO. Under the OFS, IIT Madras Incubation Cell is selling 31,050 shares. Therefore, it will be booking a profit of Rs 99.67 lakh.  IITM Rural Technology and Business Incubator is offloading 4,191 shares, and it will take home a profit of Rs 13.10 lakh.

The IIT Madras Incubation Cell initially supported Ather Energy by providing physical infrastructure, mentorship, and other necessary resources to help its business grow and succeed.

As per the red herring prospectus (RHP), both the incubators were collectively allotted a 5 per cent stake in 2013 for providing office space, mentoring, and other sorts of support required for the business to succeed. However, as Ather brought in more investors over the years, the incubators' stakes went down to just 0.52 per cent.

Ather Energy – India's 4th Largest Electric Two-Wheeler Maker

As of April-December of fiscal 2025, Ather was the fourth largest electric two-wheeler manufacturer in India by sales volume, after Ola Electric, TVS and Bajaj.

The EV maker's manufacturing facility is located at Hosur, Tamil Nadu. With the IPO proceeds, it is planning to set up another manufacturing plant in Maharashtra.

Axis Capital's IPO note states, "In fiscal 2024, Ather Energy's sales grew by 39.3 per cent year-on-year (YoY) to cross the 1 lakh unit mark. Ather's market share witnessed a growth of 25 per cent YoY in the April–December period of fiscal 2025 with 90,351 units sold compared to 71,973 units sold during the same period in April-December of fiscal 2024."

Ather Energy's Financial Performance

In fiscal years 2024, 2023 and 2022, Ather generated revenue from operations of Rs 1,570.6 crore, Rs 1,432.7 crore and Rs 370.2 crore, respectively. This represents a CAGR of 106 per cent for the past three fiscal years.

In the nine months ended December 31, 2024, the company generated revenue from operations of Rs 1,393 crore, as compared to Rs 1,015 crore for the corresponding period in fiscal 2023, representing a growth of 26 per cent.