The board of Hero MotoCorp, India’s largest two-wheeler maker, has approved the investment of up to Rs 550 crore in the rights issue of Ather Energy which will push up its stake in the Bengaluru-based start-up.
The proposed investment, which is its largest in the start-up, is being made in Series E2 Compulsory Convertible Preference Shares and is subject to the execution of definitive documents and completion of certain conditions.
With this latest round Hero will have made a total investment of Rs 917 crore in Ather since its first investment done in 2016. Ather’s loss attributable to the 33.1% stake held by Hero for FY23 stood at Rs 192.5 crore. Hero expects to conclude the transaction by the end of September.
“Post the investment/subscription, the company’s shareholding in Ather Energy shall increase. The exact shareholding will be determined upon completion of the capital raise round by Ather,” said clarification from Hero.
Led by Tarun Mehta, Ather is India’s third largest electric two-wheeler producing company having a share of 12% as at the end of July, as per data shared by the Federation of Automobile Dealers Association.
Ather’s turnover for FY23 was Rs 1,806.1 crore, which was a four-fold growth compared to Rs 413.8 crore posted in FY22.
As per Fintrackr’s estimates, Ather Energy was valued at around $750 million during a $50 million round in October last year. The company was on the verge of becoming the second unicorn in EV space after Ola Electric.
After a brief upset in July, electric two-wheeler numbers were back to normal levels in August at 62,000 units, as per data shared by Vahan. Prior to the disruption caused by the government’s notice announcing the reduction in incentives effective from June 1, there was a surge in sales in May when consumers rushed to buy the products to beat the price hike.
