Hero MotoCorp’s board of directors has approved an investment of up to Rs 550 crore in Ather Energy, an electric two-wheeler manufacturer. Hero MotoCorp, the world’s largest two-wheeler maker, is an existing investor in Ather Energy.
Ather Energy plans to go public by 2024, but it prioritizes profitability before considering an IPO. In October 2022, Ather Energy secured $50 million in equity funding, led by existing investor Caladium Investment Pte Ltd.
The funding round valued Ather Energy at $700 million and aimed to elevate the company to unicorn status. Ather Energy, founded in 2013, manufactures electric scooters, including the Ather 450X, Ather 450 Plus, and Ather 450S.
The company has manufacturing facilities in Tamil Nadu and is expanding its annual production capacity from 4.2 lakh units to nearly 15 lakh units. Ather Energy aims to double its market share to 30-40 % by introducing more affordable electric scooters, like the 450S in the 125cc category.
In August, Ather Energy sold approximately 6,835 units, marking a 2 % increase compared to the previous month. The investment comes as Ather Energy seeks to secure funds for its initial public offering (IPO).
The investment is subject to the execution of definitive documents and completion of certain conditions customary to a transaction of this nature, according to a filing with the stock exchange. The board of directors of Hero MotoCorp approved an investment of up to Rs 550 crore in the rights issue of Ather Energy at its meeting held September 4, the filing said. The investment approval comes as the electric vehicle manufacturer sought to close a funding round before its first public offering. Hero MotoCorp has invested over Rs 1,000 crore in Bengaluru-based Ather Energy and holds 33.1% of the company. The fresh investment is being made in Series E2 compulsory convertible preference shares.
