Ather Energy has initiated preliminary conversations with at least three investment banks as it prepares to appoint advisers for its first capital raising exercise since listing on stock exchanges in May 2025. According to Moneycontrol, the company is expected to launch the fundraising process as early as July and is looking to raise up to ₹2,500 crore through multiple instruments. The board has already approved a proposal to mobilise up to ₹2,500 crore through qualified institutional placements (QIPs) and equity instruments, with ₹1,500 crore proposed to be raised through QIPs of equity shares in one or more tranches, and the remaining ₹1,000 crore through equity shares, foreign currency convertible bonds (FCCBs), preferential allotments, rights issues, or other eligible securities. The fundraising would mark Ather's first major capital raise after its public listing last year, with the company currently operating at 90% capacity utilisation and seeking ways to exceed 100% in the coming weeks.
The fundraising comes as Ather prepares to operationalise the first phase of its Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra. According to The Financial Express, the facility will be the company's largest manufacturing plant with an annual capacity of one million units at full scale. The first phase, with a capacity of 500,000 units, is expected to be commissioned by the end of the current calendar year. Co-founder and CEO Tarun Mehta emphasized the urgency of the expansion, stating "The new factory can't go live fast enough." The company has already deployed ₹927 crore from the nearly ₹3,000 crore raised through its initial public offering last year toward this project, with the remaining funds earmarked for the facility's completion. Factory 3.0 is scheduled to begin commercial operations by October 2026, with the second phase planned for completion by March 2027, which will take the company's total annual capacity to 14.20 lakh units.
Ather's fundraising comes amid robust operational performance, with the company selling around 83,000 electric scooters in the March quarter, according to its quarterly results. As reported by ETAuto, this performance was supported by growing demand across both southern and northern India. The company doubled its retail footprint from 351 stores to 700 stores during FY26, while its service network also expanded significantly. This expansion strategy has unlocked volumes well beyond Ather's traditional urban strongholds, demonstrating the company's successful geographic diversification. The fundraising move comes weeks after rival Ola Electric raised ₹780 crore through a QIP on June 4, attracting participation from investors including SBI Mutual Fund, Motilal Oswal Mutual Fund, and Invesco.
Ather reported a net loss of ₹79.6 crore for the quarter ended March 2026, an improvement from the ₹197.8 crore loss recorded in the corresponding period a year earlier. Revenue from operations rose 50.2% year-on-year to ₹953.6 crore during the quarter. The company's shares have witnessed a strong rally in recent weeks, with the stock gaining sharply from its January lows amid improving financial performance, growing investor interest in the electric mobility segment and expectations around the proposed fundraising exercise. According to market data, Ather Energy shares closed at ₹1,028.15 on the BSE on Friday, reflecting positive investor sentiment toward the company's expansion plans and competitive positioning in India's electric two-wheeler market.
The competitive landscape presents significant challenges for Ather's expansion plans, with TVS Motor and Bajaj Auto together controlling nearly 45% of the market in India's electric two-wheeler segment. According to latest market data, TVS Motor sold 3.41 lakh units in FY26 with a 24.4% market share, while Bajaj Auto sold 2.89 lakh units with a 20.6% market share. Ather's 82.34% volume growth is the strongest among the top three players, but the company faces the challenge of competing against established players with deeper pockets and structural cost advantages from their internal combustion engine businesses. The EL platform launch is designed as a mass-market architecture that can underpin multiple scooter variants, enabling Ather to compete directly in sub-₹1 lakh segments currently dominated by Bajaj's Chetak. However, the battery cost environment adds another layer of risk, with lithium prices remaining more than twice historical levels and battery cell costs rising between 30% and 50% in recent quarters due to commodity inflation and supply-chain challenges.
