Date: September 5, 2023. — Hero MotoCorp has announced plans to make a new investment of up to $66.5 million to enhance its share in Ather Energy, an Indian electric vehicle startup. Hero MotoCorp stated in a stock exchange filing that its board of directors had approved a new investment of up to $66.5 million in the rights issue of Ather Energy.
The two-wheeler giant had already acquired a significant stake in Ather Energy through previous investments in the company. Hero’s latest investment in Ather signifies their strong confidence in the company and mirrors India’s surging demand for electric vehicles.
Ather Energy, a Bengaluru-based company, already has a 33.1% share owned by Hero MotoCorp. Ather Energy had previously raised $336 million from investors. Some of these investors include Tiger Global, the founders of Flipkart (Sachin and Binny Bansal), and India’s quasi-sovereign fund NIIF. In a round last year, it received a $739 million valuation.
Hero MotoCorp’s additional investment is expected to fuel Ather’s research and development efforts. It enables the company to further enhance its EV offerings and expand its market reach. The partnership between these two prominent players in the Indian automotive industry is likely to accelerate. It will also promote the adoption of electric mobility solutions in the country.
By the end of this year, Ather Energy was on target to generate $1 billion in sales. However, the Ministry of Heavy Industries altered the two-wheeler subsidy program. This had an impact on Ather Energy’s prospects for expansion.
Hero MotoCorp stated that the valuation of Ather Energy in the rights issue is pending a decision. They also mentioned their intention to increase their stake in Ather Energy. Ather Energy reported a revenue of $218.3 million for the fiscal year ending in March. These developments highlight Hero MotoCorp’s strategic interest in Ather Energy.
This move comes as India pushes for a greener and more sustainable transportation landscape, with various state governments offering incentives and subsidies to promote EV adoption. Moreover, Hero MotoCorp’s increased investment in Ather Energy aligns with the broader goal of reducing carbon emissions and transitioning to cleaner transportation options.
As the electric vehicle industry in India continues to evolve rapidly, Hero MotoCorp’s strategic investment in Ather Energy showcases its commitment to staying at the forefront of this transformative shift. Moreover, this financial injection is set to strengthen the Ather brand and contribute to the electrification of India’s two-wheeler market.