Indian electric scooter manufacturer Ather Energy plans to raise up to $530 million through its initial public offer, its draft prospectus filed on Monday said (PDF), in a bid to cash in on soaring demand for electric vehicles in the world’s third-biggest automotive market.
The Bengaluru-based startup—that is competing with newly listed Ola Electric—is targeting a valuation between $1.5 billion and $2 billion, according to sources familiar with the matter who spoke to Eltrys. The company announced it intends to sell fresh shares worth $370 million in the IPO, as well as a proposed sale of as many as 22 million shares by existing investors.
Ather Energy declined to comment.
The startup said it intends to use the proceeds for making a new manufacturing facility in Maharashtra, repaying borrowings, and furthering research and development. 
The announcement of the IPO comes as the market for electric vehicles in India is expanding thanks to government incentives and rising fuel costs. It wants 30% of private cars and 70% of commercial vehicles to run on electricity by 2030.
As of late August, Ather Energy held about 19% of the market for electric two-wheelers, according to government data. Hero MotoCorp and the sovereign wealth fund National Investment and Infrastructure Fund are also supporters.
Competition is intense for the startup against well-capitalised new entrants and established automakers hungry for a chunk of India’s fast-growing electric two-wheeler market. Though the leader, Ola Electric, enjoys a sizeable 31% market share, TVS Motor has 20%, and Bajaj Auto has 19%. Hero holds close to 5% of the market.
Well-established automobile makers have become more frantic in their efforts to gain a better presence in the Indian electric vehicle market, and their results are promising too. Bajaj Auto had 11% market share at the end of June this year.
Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather is famous for its proprietary design methodology and designs in-house 80% of its key components. It has raised close to $500 million in funding across various rounds to date, according to Tracxn. It also reported a loss of $126 million against revenue of $213 million for the year ending in March.
Bookrunners leading Ather’s IPO include Axis Capital, HSBC, JM Financial, and Nomura.
