Ather Narrows Losses, Boosts Gross Margin in First Nine Months of FY25

Electric two-wheeler manufacturer Ather Energy reported an improvement in financial performance during the nine months ended December 2024, even as its market share remained at around 10%. 

The improvement is largely credited to the successful launch of the Rizta scooter, which targets the family and convenience-focused segment. The Rizta accounted for over 50% of Ather’s total sales in nine months ended December 2024. Additionally, better cost control and streamlined sourcing also contributed to healthier margins and reduced losses.

Ather’s adjusted gross margin rose to 19%, up from 9% in the same period the previous year, as per the Red Herring Prospectus filed by the company. The metric is derived by dividing adjusted gross margin by total income. 

Ather also narrowed its net loss to ₹578 crore in the nine-month period of FY25, compared to ₹776.4 crore in the same period of FY24—a reduction of nearly 25%. For the full FY24, the company had posted a loss of ₹1,059 crore, up from ₹864 crore in FY23.

Revenue from operations grew to ₹1,579 crore in the nine months of FY25, up from ₹1,230 crore a year earlier. The RHP also notes that Ather’s operational revenue surged 329% between FY22 and FY24, and rose 28% year-on-year during the most recent nine-month period.

The company attributed this sustained growth to its premium brand positioning, stronger electric two-wheeler sales, and continued investment in R&D, which has helped lower the bill of materials (BOM) cost. Ather reaffirmed its strategic focus on improving unit economics, product quality, and user experience as it moves toward profitability. 

The company is set to launch its initial public offering (IPO) on April 28, 2025, aiming to raise approximately ₹2,626 crore through a fresh issue and an offer-for-sale (OFS) of 1.1 crore shares. The IPO is expected to priced in the ₹310-330 per share range, and follows the success of rival Ola Electric’s public debut in August 2024. 

Ather, backed by Hero MotoCorp, has revised its valuation to around $1.4-1.5 billoin (₹12,000-12,500 crore), a 25-30% reduction from earlier estimates, reflecting cautious market sentiment amid volatile secondary markets. 

The company reported revenues of ₹1,789.1 crore and a net loss of ₹864.5 crore in FY24. Ather’s IPO follows the high-profile listings of Hyundai Motor India and Ola Electric in 2024. Hyundai’s ₹27,870 crore IPO, the largest in Indian history, debuted in October 2024 but faced challenges with a modest listing gain, trading marginally above its issue price of ₹1,960. It is currently being traded at Rs 1,682 per share. Ather's competitor, Ola Electric, also raised ₹6,145 crore via an IPO. Ola shares are trading at around Rs 51, compared to the issue price of Rs 76. However, Ather is reported to be more focused on quality and less on volumes compared to Ola.  Ather, founded in 2013 by Tarun Mehta and Swapnil Jain, is the fourth-largest electric two-wheeler maker in India, known for models like the Ather 450 series and Rizta. 

The IPO funds will fuel expansion, with Hero MotoCorp retaining its 37% stake, while early investors like Tiger Global and founders offload shares. Despite a 20% sales growth in 2024, Ather faces stiff competition from Ola, Bajaj Auto, and TVS Motor, compounded by an 8% decline in EV scooter sales in February 2025. Ather’s strategic pricing and shareholder quota for Hero MotoCorp investors aim to boost retail participation.