'a ₹50 Crore Payoff': How Iit Madras Turned A ₹29 Lakh Bet Into A Massive Ather Energy Windfall

When Ather Energy lists connected nan banal marketplace this week, it won't conscionable beryllium founders aliases investors celebrating. Quietly, and spectacularly, IIT Madras will locomotion distant pinch 1 of nan biggest wins of all.

Financial advisor Aditya Kondawar captured it perfectly connected LinkedIn: “The biggest victor successful nan Ather IPO is IIT-Madras Incubation Cell (IITMIC)!”

For an first finance of conscionable ₹15–29 lakh, IIT Madras' incubation arms—through IITMIC and IITMS Rural—now beryllium connected shares worthy ₹50 crore. That’s a jaw-dropping return of 172x to 333x successful conscionable 11 years, a feat that would make moreover seasoned task capitalists envious.

In its early days, Ather Energy had allotted 5% of its paid-up stock superior to IIT Madras Incubation Cell (IITMIC) and nan IITM Rural Technology and Business Incubator (RTBI) successful speech for agency space, mentorship, and entree to resources. Both entities run from wrong nan IIT Madras field and often collaborate connected startup investments.

According to nan reddish herring prospectus (RHP), nan 2 incubation cells presently clasp a mixed 15.58 lakh shares successful Ather. At nan IPO’s precocious value set of ₹321 per share, this liking is weighted astatine astir ₹50 crore.

Under nan connection for waste (OFS), IITMIC will offload 31,050 shares and RTBI will waste 4,191 shares.

Kondawar besides noted IIT Madras' wider occurrence successful nan startup ecosystem: “IIT Madras Incubation Cell (IITMIC) has an 80% occurrence complaint pinch startups!”

As of nan extremity of 2023, IITMIC’s portfolio included 351 heavy tech startups weighted collectively astatine ₹45,000 crore ($5.4 billion), creating astir 8,000–9,000 nonstop jobs.

"The endurance complaint of IITMIC-backed startups is 80%, compared to nan emblematic 4–6%. IITMIC holds a 1% equity liking successful galore companies," writes Kondawar, adding that nan entity generates ₹50–60 crore annually from its equity stakes.

Around 25% of IITM’s 550 module members are actively progressive successful nan investigation park.

It’s not conscionable IIT Madras celebrating. Several early investors successful Ather Energy are group to reap awesome gains.

Tiger Global, which invested successful 2015, is poised to gain 8.3x returns done its arm, Internet Fund Pte, by trading astir 4 lakh shares successful nan OFS.

Singapore’s sovereign wealthiness money GIC (via Caladium Investment) and India’s National Investment and Infrastructure Fund (NIIF)—both investors since 2022—are expected to timepiece returns of 1.6x and 1.7x, respectively.

As Ather Energy prepares for its adjacent phase, investors are besides keen to measure nan broader electrical conveyance (EV) market. Here’s what Zerodha highlights arsenic cardinal factors erstwhile analyzing EV companies (and not conscionable Ather):

• Lithium value movement: Lithium, cobalt, and nickel prices effect EV artillery costs, which successful move impact conveyance pricing.
• Supply chains: EV makers are heavy reliant connected China for artillery cells. China, successful turn, sources minerals from countries for illustration Chile, Bolivia, and Australia. Any world disruption—like COVID—can effect accumulation and revenue. For Ather, China accounts for 28% of input costs.
• Government subsidies: EV incentives are declining. Ather’s mean trading value fell from ₹1.58 lakh successful FY22 to ₹1.43 lakh successful FY24 owed to reduced subsidies.
• Product value and efficiency: Charging times, safety, and capacity are captious to gaining customer spot successful nan EV space.
• Demand shifts: Electric two-wheelers must turn faster than accepted substance bikes to summation their marketplace share.
• Segment performance: For companies making some petrol and electrical vehicles, it's important to way EV income separately. For instance, TVS Motors gets astir 6% of its income from EVs, but EV volumes grew astatine 40% versus 12% for petrol bikes complete 9 months to December 2024.