Greaves Electric, the parent entity of electric vehicle (EV) maker Ampere, formally filed its Draft Red Herring Prospectus with India’s Securities and Exchange Board to raise ₹1,000 cr in an initial public offering it has set for a September listing. The company files the prospectus for making an IPO, which would aim to garner ₹1,000 cr, incurring around $119 million.
PC: Inc42
The fresh equity issue shall total up to ₹1,000 crore. Also, a concurrent offer for sale has been planned with equity shares up to 18.94 crore. In this process of offer for sale, promoter shareholder Greaves Cotton Limited has proposed to sell off an equity holding of 8.5% from the said holding, and on its part, Abdul Latif Jameel Green Mobility wants to sell off an equivalent 39.54% stake in Ampere. The exact price band and minimum lot size for the shares will be decided in consultation with the lead book-running managers during the book-building process.
Motilal Oswal, IIFL Capital, and JM Financial have been appointed as the lead book-running managers for the IPO, ensuring a structured approach to the offering.
Financial Performance Overview
Ampere’s financial health has been under scrutiny, particularly following a challenging fiscal year. For the quarter ending in September 2024, it reported revenue from operations of ₹302 crore but incurred significant loss of ₹107 crore. The previous fiscal year or FY24 saw a drastic drop of 46% in its revenue, with scooter sales plummeting by nearly 60%. In addition to this, the company’s losses have widened more than tenfold to ₹215 crore, mainly due to significant decline in operational scale.
This reflects the broader challenges being faced by the EV sector in India – increased competition, changes in consumer preferences.
The financial performance highlights a need for Ampere to rethink its market strategy and restore consumer confidence.
Market Context and Competitive Landscape
Indian EV markets are changing dramatically. The market is dotted with many players trying to be on top. Recent Ola Electric IPO has set a new benchmark for market expectations in its ₹6,145 crore IPO. Ola’s shares, which were earlier put up for an initial offer with a price band of ₹72-76, are currently trading at ₹94. This gives it a market capitalization of ₹41,488 crore ($4.93 billion). Ather Energy has also filed DRHP for a fresh issue of ₹3,100 crore, indicating strong interest of the investor fraternity in the electric vehicle sector.
In this competitive landscape, the IPO of Greaves Electric is an important opportunity in securing the needed capital for improving product offerings and enlarging its market presence. Capital raised may help in supporting R&D initiatives, improving manufacturing capabilities, and raising brand visibility in a very crowded marketplace.
Future Outlook
Greaves Electric has both opportunities and challenges ahead of it as it prepares for its IPO. The company is facing a favorable environment for future growth with the growing demand for electric vehicles, encouraged by government incentives and increasing environmental awareness. However, the company needs to overcome recent financial setbacks and strategize effectively to regain market share.
In conclusion, Greaves Electric’s IPO filing is a significant milestone in its journey, reflecting its commitment to capitalizing on the burgeoning EV market in India. The success of this offering will depend on the company’s ability to articulate a clear growth strategy and restore investor confidence amid a shifting competitive landscape. The EV sector is continuously evolving, and the upcoming IPO could be the one that makes all the difference for Greaves Electric and its subsidiary, Ampere, as it heralds a new chapter in their corporate narrative.
