Ather Energy Pvt., an Indian electric-scooter maker backed by Hero MotoCorp Ltd., may pursue its planned initial public offering in Mumbai at about $1.2 billion valuation, according to people familiar with the matter.

The company, which had initially targeted a valuation of about $2 billion, could aim to sell shares by the end of March or early April, the people said, asking not to be identified because the deliberations are private. A share sale could help Ather raise about $400 million, the people said.

Considerations are ongoing and details such as the valuation, timing and size could still change, the people said.

A representative for Ather declined to comment.

Bloomberg News reported last year that Ather was working with investment banks on a potential IPO in Mumbai.

After nine straight years of gains, India’s benchmark Sensex has been sliding in recent months. It is down about 5% this year and 14% from a September peak.

The offering will comprise both primary and secondary shares, with founders Tarun Mehta and Swapnil Jain as well as existing investors including National Investment and Infrastructure Fund Ltd. and Tiger Global Management’s Internet Fund III offloading stakes, according to IPO documents. Hero MotoCorp, Ather’s biggest shareholder with a stake of just over 37%, will not participate in the share sale.

Founded in 2013, Ather was among India’s earliest electric two-wheeler startups. While initially positioned as a premium player, the company has sought to expand its market share in the face of growing competition from legacy manufacturers Bajaj Auto Ltd. and TVS Motor Co., as well as Ola Electric Mobility Ltd.

The IPO comes amid cooling demand for electric scooters in India. Sales of two-wheelers in February declined 8% from a year earlier to 76,086 units, data from the Federation of Automobile Dealers’ Association show. Last year, Ather’s sales grew 20%, while Ola’s rose 52%.

The share sale would be the second by an Indian pure-play electric vehicle maker. Ola, backed by Japan’s Softbank Group Corp., made its market debut last year.

Ola’s shares have tumbled as much as 65% from a peak in August, when the company’s market value reached $7.7 billion. Ola was trading at a record low on Tuesday with a market value of about $2.6 billion.