IPO-bound Ather Energy plans aggressive marketing push to strengthen EV brand

Ather Energy, the IPO-bound electric two-wheeler manufacturer, intends to spend millions on advertisement and marketing to strengthen its brand in the EV segment. According to the draft red herring prospectus (DRHP), Ather incurred Rs 107 crore, Rs 226 crore, and Rs 54 crore (approx) on advertisement and marketing expenses (inclusive of taxes) in FY 2024, 2023, and 2022, respectively.

Ather plans to utilize Rs 300 crore of its net proceeds to fund "advertising and marketing efforts" in the upcoming years. The company has allocated Rs 10 crore for the current fiscal year (FY25), Rs 140 crore for FY 2026, and Rs 150 crore for FY 2027.

In its DRHP, Ather mentioned that it would invest in "marketing and promotion activities, branding, promotion, acquisition, and marketing campaigns to increase customer awareness and affinity towards the brand". The Bengaluru-headquartered company started focusing on brand building and expanding its retail footprint from FY2022 onwards.

Ather also undertook brand campaigns and scaled up marketing investments in FY23 with the launch of Ather 450X (Generation 3) and Ather 450X (Generation 3.1). However, the company reduced its marketing and advertisement spending last year due to a slowdown in consumer demand, it stated.

Ather has adopted a two-phase marketing strategy, which includes organizing community outreaches, beta test drives, and influencer marketing. In the second phase, Ather invested Rs 38.6 crore over two fiscals, leveraging sporting events and teams, procuring influencer endorsements, and releasing creative advertisements. Backed by Indian auto major Hero MotoCorp, Ather mentioned that the promotional campaigns enabled it to gain close to 17 hours and 15 hours of brand exposure during FY2023 and 2022, respectively. Additionally, the ad campaigns during FY23 garnered 487 million total views from 17 million viewers across all media platforms.

On Monday, Ather Energy announced the launch of its initial public offering (IPO) to raise Rs 3,100 crore. The proceeds will be used for capital expenditure to establish an electric two-wheeler factory in Maharashtra and for research and development, the company said. Last month, Ather's competitor Ola Electric made its debut on the Indian stock market. The SoftBank Group Corp.-backed EV maker spent Rs 79.3 crore on marketing and advertisement in FY24. Ola Electric's share prices were up 2.26 points to Rs 116.86 on the BSE at 12:29 pm on Tuesday.