Hero MotoCorp Invests Rs 550 Crore in Ather Energy through Right Issue

Multinational motorcycle manufacturer Hero MotoCorp to invest in electric scooter manufacturer Ather Energy

Bengaluru, India - September 5, 2023, - Ather Energy, a leading electric scooter manufacturer based in Bengaluru, has announced a significant financial agreement with Hero MotoCorp, a renowned motorcycle manufacturer. The agreement entails Hero MotoCorp's investment of Rs 550 crore in Ather Energy through a right issue, marking a strategic move within the electric vehicle (EV) industry.

Hero MotoCorp's Resolution for Investment

In a board meeting held on September 4, Hero MotoCorp passed a resolution to invest Rs 550 crore in Ather Energy. This investment will be made through Series E2 compulsory convertible preference shares under the right issue plan. The details of this development were obtained from the National Stock Exchange (NSE) disclosure.

Hero MotoCorp's Stake in Ather Energy

Hero MotoCorp is not a newcomer to Ather Energy; it currently holds a stake of 33.1% in the company. This investment reinforces their commitment to the EV sector. In May 2022, Hero MotoCorp co-led a substantial $128 million funding round in Ather Energy, demonstrating their ongoing support for the company's growth.

Conditions for Investment

The disclosure regarding Hero MotoCorp's investment specifies that it is contingent upon the execution of definitive documents and completion of conditions customary to a transaction of this nature, emphasizing the need for due diligence in this substantial investment.

Ather Energy's Valuation and Market Position

Ather Energy had been on the cusp of achieving unicorn status within the EV space. In October of the previous year, the company was valued at approximately $750 million following a $50 million funding round. This valuation positioned Ather Energy as a prominent player in the electric vehicle industry, aiming to join the ranks of unicorn companies like Ola Electric.

Electric Two-Wheeler Sales in India

The Indian electric two-wheeler market has been experiencing significant growth. In August, more than 59,000 electric two-wheelers were sold in the country. Ola Electric currently leads this space with a substantial market share of about 29.31%, followed by TVS and Ather Energy, which sold 14,584 and 6,835 units, respectively. This data highlights the competitive landscape in the Indian EV market.

Financial Performance of Ather Energy

Ather Energy's financial performance has shown notable growth and challenges. The company reported a staggering 4.4-fold increase in revenue from operations, reaching Rs 1806.1 crore in the fiscal year 2023, compared to Rs 413.8 crore in the previous fiscal year. However, its losses reportedly surged by 151.2%, reaching Rs 864.5 crore in FY23. This financial data underscores the dynamic nature of the EV industry and the need for substantial investments to drive growth and sustainability.

As Ather Energy continues to expand its presence in the EV sector, Hero MotoCorp's investment will likely play a pivotal role in shaping the company's future and further strengthening its position in the competitive electric scooter market.