Ather's IPO, Natural's legacy, & McCain's ₹1,200 Cr. Playbook💡
A lot to unpack today- Ather, Natural's and McCain's.
We're back with our “business edition” newsletter, which covers three important business topics in one go. Today, we discuss Ather's ~2,600 Cr. IPO, Natural's legacy, & McCain's ₹1,200 Cr. Playbook.
Ather’s ~₹2,600 Cr. IPO💰
First, some context.
The upcoming IPO includes a fresh equity issue worth ~₹2,600 Cr. and an offer-for-sale of 1.1 crore shares by existing investors and promoters. Sellers include NIIF II, Internet Fund III, IITM Incubation Cell, IITMS Rural Tech Incubator, and co-founders Tarun Mehta and Swapnil Jain.
But, how’s the space looking?
One word: consolidation. Legacy giants like Bajaj and TVS are tightening their grip as Ola loses ground. Bajaj is leading the pack while Ather holds fourth. In this capital-heavy game, scale matters — more stores, better machinery etc. The IPO fuels exactly that. And with EV penetration at just 5–9% while for China it is at ~40%, so the growth runway is wide open and every player needs to move as fast as it can.
Where will the IPO money go?
As per the DRHP, Ather plans to use the IPO proceeds for a new Maharashtra plant (₹927 crore), R&D (₹750 crore), and marketing (₹300 crore). This makes sense because the company’s moat for the longest time has been it’s tech superiority compared to other players. For ex. it was the first player in India to introduce a touchscreen dashboard on the device.
Is the timing correct?
Not sure. The Nifty 50 is down ~9% from its Sep’24 peak, and the IPO market has seen a 2-month lull. It’s been a messy stretch, not exactly the setup for a blockbuster debut. Ather’s listing will be one to watch, especially given the less-than-ideal timing.
Natural’s 40-year-old ice cream legacy🍦
This 40-year-old family-run ice cream brand pulls in ₹300 crore a year — in a ₹30,000 crore industry. The kicker? Naturals did it with zero external funding, under 1% spent on marketing, and has been profitable since day one. A masterclass in building a brand the old-school way. Let’s dig into what they cracked.
The whitespace for real fruit ice-cream.
In 1991, while big brands ruled the ice cream market, RS Kamath saw a gap: no one used real fruit. Naturals changed that with ice creams made from just milk, sugar, and fruit — no artificial flavors or colors. They used unique fruits like sitaphal and coconut, standing out in the crowded market. By using only milk fat, they set themselves apart from the frozen desserts (which look like and feel like ice-creams) that many others made.
Affordable yet premium.
Naturals positioned itself in the sweet spot of the price pyramid, offering a slight premium over mass brands like Amul while staying affordable. This smart pricing strategy worked well, especially as India’s ice cream market grows. Also, it replicated the Baskin Robbins approach by creating parlour-style stores, offering customers a premium experience. This smart move set them apart from mass-market brands, making it about more than just buying ice cream — it was about enjoying the moment.
The rigid approach.
Naturals stuck to its vision, even when it meant higher costs. They built their own machines to deseed fruits, ensuring quality. The brand avoided trends and stuck to fruit-based ice creams. By never taking outside funding, they kept full control and stayed focused on long-term “sustainable dhandha.”
McCain India’s ₹1,200 cr. playbook🫓
McCain, since entering India in 1998, has become the leader in frozen foods, with FY24 revenue crossing ₹1,200 cr. Known for french fries, the brand has successfully expanded its portfolio to stay competitive. Let’s dig into what they cracked in the last 2 decades.
The indianisation strategy.
McCain has mastered the Indian market by blending local flavors like Aloo Tikki and Masala Fries. They’ve realized that retaining customers means offering more than just indulgent foods. While fries and tikkis remain core, they continuously add new products, increasing customer lifetime value and ensuring brand loyalty.
The distribution game.
Atlas Distributors is the official partner for McCain in India, and they've totally nailed it when it comes to reaching Tier 1 and Tier 2 cities as this partnership has worked out really well for them. They've hit all the right channels — modern trade, general trade, and even quick commerce, making sure McCain products are everywhere.
The B2B-first masterstroke.
McCain started in India by nailing the B2B game with R&D. They started focusing on hotels, restaurants, and caterers to build trust and learn about the local palate. They set up a ₹109 crore plant in Mehsana way back in 2006, then expanded to Deesa, ramping up capacity to 30,000 tonnes/year. This cut down on imports and made the supply chain super efficient. Everything from sourcing to packaging is local, which makes them the most reliable partner in the B2B space, helping them win the best contracts.
We came across this rabbit hole.
The Capital Markets Yearbook by Zerodha. It discusses in depth why and how our capital markets have behaved over the last few years. What’s the underlying movement, and more importantly, how does money flow between asset classes? If you are an active investor in the Indian stock market, this is a must-read.
“In my 14 years as a stockbroker, I can confidently say that the Indian stock market has never been more mainstream than it is today. Despite all the changes, there wasn't a single publication that documented the transformation of our markets—until now. This Yearbook is our attempt to do just that, in partnership with IndiaDataHub”
~ Nithin Kamath (Founder & CEO, Zerodha)
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