Ather Energy Limited filed its Monitoring Agency Report for the quarter ended March 31, 2026, with the stock exchanges on May 04, 2026, pursuant to Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Regulation 41 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The report was prepared by CARE Ratings Limited, which serves as the designated Monitoring Agency for the company's IPO proceeds aggregating to Rs. 2626.00 crore. The IPO was a public issue of equity shares conducted from April 28, 2025 to April 30, 2025. The company's promoters are Tarun Sanjay Mehta, Swapnil Babanlal Jain, and Hero Motocorp Limited, and it operates in the Automobiles and Auto Components — Automobiles sector.

IPO Proceeds Utilisation as at March 31, 2026

As at the end of the quarter ended March 31, 2026, cumulative utilisation of IPO proceeds reached Rs. 1008.93 crore, with Rs. 194.98 crore deployed during the quarter alone. A total of Rs. 1617.07 crore remains unutilised. The monitoring agency confirmed that all IPO proceeds were used for objects as stated in the prospectus, all payments were routed through the monitoring agency account, and no deviations from the offer document were observed. There was also no change in the means of finance for the disclosed objects, and no major deviation was noted compared to the previous monitoring agency report dated November 10, 2025.

The table below summarises the progress in utilisation across all objects as at March 31, 2026:

Cost Revisions and Object-wise Commentary

Two line items saw minor revisions in their allocated amounts following a Board of Directors resolution dated February 02, 2026. Issue expenses were revised downward from Rs. 116.60 crore to Rs. 110.00 crore on account of actual issue expenses being lower than originally estimated. The resultant difference was reallocated to general corporate purposes, raising that allocation from Rs. 492.20 crore to Rs. 498.80 crore. All other objects — E2W factory capital expenditure (Rs. 927.20 crore), repayment of borrowings (Rs. 40.00 crore), research and development (Rs. 750.00 crore), and marketing initiatives (Rs. 300.00 crore) — remained unchanged. Total gross proceeds remain at Rs. 2626.00 crore.

Key expenditure details for the quarter are as follows:

• E2W Factory (Maharashtra): Rs. 60.83 crore deployed during the quarter towards civil work, raw materials, paint robots, battery pack assembly lines, overhead conveyor systems, assembly line systems, paint circulation systems, and management consultancy for construction tracking and quality checks.
• Research & Development: Rs. 69.05 crore utilised during the quarter, comprising Rs. 22.01 crore on manpower costs in the R&D department and Rs. 47.04 crore on non-manpower costs including testing and measuring equipment, vehicle lamp testing, and designing services.
• Marketing Initiatives: Rs. 22.52 crore paid to the marketing agency under a service agreement as mentioned in the prospectus.
• General Corporate Purposes: Rs. 42.58 crore utilised during the quarter, comprising Rs. 42.57 crore towards purchase of raw materials and Rs. 0.01 crore towards employee-related expenses and other operating expenses.
• Repayment of Borrowings: Fully utilised; completed as on September 30, 2025.
• Issue Expenses: No utilisation during the quarter.

Factory 3.0 — Implementation Delay and Status

The monitoring agency noted a delay in the capital expenditure object related to the establishment of the E2W factory (Factory 3.0) in Maharashtra. As per the offer document, Rs. 705.50 crore was to be deployed in FY26; actual utilisation stood at Rs. 139.63 crore. The delay is attributed to the receipt of an Environmental Clearance in September 2025, which was not originally required at the time of the prospectus filing dated April 30, 2025. This shifted the construction start from May 2025 to September 2025. Consequently, the expected commencement of production at Factory 3.0 has been revised to October 2026 from the originally envisaged July 2026. As per management, the overall project completion timeline of March 2027 remains intact. As at March 31, 2026, the company has spent 21% (including land cost) of the total project cost and has raised purchase orders worth 67% of the total project cost. Pre-construction government approvals obtained include Consent to Establish, Town and Country Planning Approvals, GST Registration, ESI Registration, and Environmental Clearance (received during Q2FY26).

A delay was also noted in marketing initiatives expenditure, with Rs. 90.44 crore paid against the FY26 target of Rs. 150.00 crore. The company noted that total marketing incurred in FY26 amounted to Rs. 128.03 crore (comprising Rs. 90.44 crore paid and Rs. 37.59 crore payable), representing over 85% of the Rs. 150.00 crore outlined in the offer document. The balance is expected to be utilised in FY27. Similarly, general corporate purposes deployment of Rs. 140.30 crore has been deferred from FY26 to FY27 on account of optimised cash management.

Deployment of Unutilised Proceeds

The unutilised IPO proceeds of Rs. 1617.07 crore as at March 31, 2026 have been deployed across fixed deposits with Axis Bank, Kotak Bank, and IDFC Bank, along with residual balances in the HSBC Bank Monitoring Account and Axis Bank Public Offer Account. The table below presents a summary of the key fixed deposit instruments:

Total earnings on the deployed proceeds, including interest received and interest accrued, amounted to Rs. 91.20 crore, with a total market value of Rs. 1626.13 crore as at the end of the quarter. The monitoring agency confirmed no conflict of interest in its relationship with the issuer while monitoring and reporting the utilisation of IPO proceeds.

Ather Energy delivered its strongest-ever performance in FY26, driven by record volumes, market share expansion, and significant improvement in financial metrics. The company sold 2,62,942 units during the year, up 69% year-on-year, with Q4 FY26 achieving its highest-ever quarterly volumes of 83,418 units, up 76% YoY. Market share climbed to 18.6% for the year, with South India maintaining leadership at 23.5% in Q4 FY26. The Board of Directors approved the audited financial results for the quarter and full year ended March 31, 2026, at a meeting held on May 04, 2026.

Operational and Financial Performance

For FY26, total income grew 66% to ₹3,823 crore from ₹2,305.22 crore in the previous year, while revenue from operations surged to ₹3,671.76 crore from ₹2,255.01 crore. Adjusted Gross Margin (AGM) jumped 116% YoY to ₹925 crore, with margin improving to 24% of total income, up approximately 500 basis points YoY. EBITDA losses reduced significantly to ₹257 crore from ₹531 crore in FY25, with margin improving to (6.7%) from (23%), reflecting a ~1,630 bps YoY improvement driven by operating leverage and disciplined cost management.

The company's net loss narrowed to ₹517 crore from ₹812 crore in FY25, with loss margin improving to (14%) from (35%). Non-vehicle revenue, comprising software subscriptions, charging, accessories, spares, and service, rose to 13% of total income in FY26, reflecting deeper ecosystem penetration. In Q4 FY26, 93% of customers opted for AtherStack Pro, underscoring strong engagement with the company's software-led ecosystem.

Quarterly Performance Summary

Ather Energy's revenue from operations for Q4 stood at ₹1,174.66 crores, compared to ₹676.08 crores in Q4 of the previous year and ₹953.64 crores in Q3 of the current year. The Adjusted Gross Margin for Q4 FY26 expanded by approximately 700 basis points to 25%, compared to 18% in Q4 FY25. EBITDA margin narrowed to (2.5%) in Q4 FY26, a ~2,080 bps improvement YoY, with EBITDA loss of ₹30 crore. The following table presents the key financial metrics across periods:

Network Expansion and Ecosystem Growth

Ather doubled its retail network during FY26, ending the year with 700 Experience Centres, up from 351 at the end of FY25. The service network expanded in tandem to approximately 548 service centres in FY26, nearly 2x its FY25 footprint. Ather's charging ecosystem scaled significantly, with customers now having access to over 6,000 charging points powered by LECCS, making it the largest fast charging network for two-wheelers in India. Middle India saw the fastest growth, with market share rising to 17.3% in Q4 FY26 from 9.5% a year ago, while Rest of India grew to 12.1% in Q4 FY26 from 6.5% in Q4 FY25.

Balance Sheet and Cash Flow Highlights

Total assets expanded substantially to ₹4,721.51 crores as at March 31, 2026, compared to ₹2,100.61 crores as at March 31, 2025, driven primarily by the IPO proceeds. Total equity rose sharply to ₹2,572.63 crores from ₹492.99 crores. Current borrowings declined to ₹145.65 crores from ₹332.99 crores, indicating partial deleveraging. For FY26, Ather Energy generated net cash from operating activities of ₹31.89 crores, a significant turnaround from net cash used in operating activities of ₹720.70 crores in FY25. The company completed its IPO of 9,28,67,945 equity shares at ₹321 per share, aggregating to ₹2,626.00 crores. As at March 31, 2026, ₹1,008.93 crores of IPO proceeds had been utilised, with ₹1,617.07 crores remaining unutilised.

Corporate Developments and Outlook

The Board approved the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors for a second term of five consecutive years, commencing from FY27 till FY31, subject to shareholder approval. During the year, the Board approved the incorporation of two wholly owned subsidiaries — a Corporate Agent subsidiary to offer insurance policies, and a Hong Kong-based subsidiary to support procurement functions. Additionally, China's export ban on certain heavy rare earth magnets caused supply chain disruptions, leading the company to defer revenue recognition of ₹24.52 crores for the full year on vehicles affected by temporary deviations in the manufacturing process for traction motors. The earnings call for the quarter and full year ended March 31, 2026, was held on May 04, 2026, and the audio recording is available on the company's website in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Looking ahead, the company has flagged that commodity costs are expected to remain volatile and elevated in the short-term due to ongoing geopolitical factors, posing a potential headwind to margin management.