What’s Behind Ather Energy’s IPO Delay and Valuation Drop?

Amid the BluSmart Mobility scandal and the ongoing crisis at Ola Electric, questions are now surfacing around Ather Energy’s delayed IPO. Once hailed as a shining beacon in India’s EV startup landscape, Ather now finds itself under a cloud of skepticism. Repeated valuation cuts, shifting IPO timelines, and fading investor sentiment have sparked concerns across boardrooms — and LinkedIn feeds. Is there more to this story than meets the public eye?

Startup analyst and LinkedIn voice Jayant Mundhra was among the first to raise red flags. In a widely circulated post, he dissected Ather’s valuation trajectory and IPO ambitions — questioning the flurry of last-minute decisions. His concern hits home: “What if there’s more than what’s known to the public?”

From $2.5 Billion to $1.5 Billion: The IPO That Keeps Shrinking

Ather raised funds at a $1.3 billion valuation in August 2024. Just a month later, it filed its DRHP with a bold $2.5 billion IPO in sight. But as market sentiment began to cool, that target quietly dropped to $2.4 billion — and was later slashed to a much more modest $1.2–1.6 billion.

Now, with listing pushed to May 2025, Ather has again lowered its IPO size to ₹2,900–3,200 crore, down from ₹3,500–3,700 crore. Its revised post-money valuation? Around ₹12,800 crore (~$1.53 billion).

For investors, this pattern signals more than external volatility. As Mundhra points out, a company appearing desperate to list “at any cost” doesn't exactly build trust — especially so close to a public debut.

Chasing Incentives or Chasing Time?

Fueling this urgency is a proposed incentive package from the Maharashtra government, reportedly linked to the timely construction of a new plant in Aurangabad. However, the details — from milestone timelines to exact incentive figures — remain unclear.

Ather plans to channel ₹927 crore from its IPO proceeds toward this new facility. But is that alone a compelling enough reason to stomach steep valuation cuts and significant shareholder dilution — including that of its own founders?

Mundhra believes this may explain the urgency. But he also questions whether it's reason enough for investors to get comfortable with the terms.

Ola’s Implosion and the EV Sector Overhang

Ather’s troubles aren’t isolated. Investor trust in India’s electric two-wheeler market is already shaken — and Ola Electric has played a big role in that.

Ola’s sales dropped by over 50% YoY in April. Its market share nosedived from 52% in April 2023 to 19% in December, recovering only slightly to 25% by January 2025. The company’s much-touted 50,000-unit monthly sales target is far from reality. In February, government data showed less than 10,000 scooters sold, while Ola claimed 25,000 — citing registration delays.

Meanwhile, the Central Consumer Protection Authority (CCPA) issued notices after over 10,000 customer complaints, and the Transport Ministry flagged registration discrepancies.

Financially, the cracks are widening. Ola posted a $65 million loss in Q3 FY24, up from $43.6 million a year earlier. Suppliers have walked out over delayed payments, and at least one filed an insolvency plea — since settled, but still revealing.

This erosion of trust has cast a long shadow over the entire EV ecosystem — and Ather, despite being better managed, is not immune.

Admiring Founders vs Evaluating Investments

Credit where it's due — Tarun Mehta and Swapnil Jain have built something remarkable. Staying committed to the EV mission for over a decade, long before it was trendy, shows vision and grit.

But as Mundhra rightly notes, admiration shouldn’t cloud judgment. Investors must separate founder charisma from business fundamentals. Public markets require more than passion — they demand transparency, solid metrics, and well-timed execution.

IPO Delays, Valuation Cuts, and the EV Reality Check

Ather’s IPO was supposed to be a landmark moment for India’s EV story. Instead, it’s fast becoming a litmus test — not just for Ather, but for the credibility of an industry that’s still finding its footing.

Between the BluSmart scandal, Ola’s unraveling, and Ather’s shifting valuation, the sentiment that once charged up the EV sector is now giving way to caution. These valuation cuts and delays may reflect macro uncertainty — but they may also hint at deeper, structural risks.

And while the founders’ commitment is unquestionable, public markets demand more than narrative. They demand clarity, confidence, and above all — credibility.

As Jayant Mundhra highlights, the red flags may be subtle, but they’re hard to ignore. For investors, this might be the time to pause and ask:
Is this the right vehicle — or just the right story?

At TICE, we’ll continue tracking this unfolding story and what it means for the future of Indian innovation.

Disclaimer: This article is based on a LinkedIn post and publicly available secondary research. For updates, new information, or corrections (if any), please write to us at editorial@tice.news.