Hero MotoCorp to invest Rs 550 crore in EV maker Ather Energy

Indian motorcycle maker Hero MotoCorp said it will invest Rs 550 crore or around $66 million in Ola Electric rival Ather Energy via a rights issue.

"The Board of Directors of the Company, at its meeting held on September 4, 2023, has approved an investment of up to Rs 550 crore (Rupees five hundred fifty crore) in the Rights issue of Ather Energy Private Limited. The investment is subject to the execution of definitive documents and completion of certain conditions customary to a transaction of this nature," the motorcycle company informed in an exchange filing.

Hero MotoCorp said the investment is being made in Series E2 Compulsory Convertible Preference Shares. Prior to this deal, HMCL held a 33.1% stake in Ather Energy since its initial investment in 2016.

Post the investment, HMCL's holdings in the Indian EV maker would increase, the company said.

The development comes after Ather Energy reportedly dropped its plans to raise $250 million or approximately Rs 2,000 crore due to the ongoing funding winter and slowing EV sales. The Arc had reported the round could have valued Ather at $1.3 billion, a new unicorn in the Indian startup ecosystem.

Ather was last near to achieving unicorn status after it raised $50 million in funding from existing investor Caladium at $700-800 million.

The company said that the deal is expected to be completed by the end of September 2023. Ather Energy Pvt. Ltd. is a Bangalore-based electric two-wheeler maker founded in 2013 by two IITians, Swapnil Jain and Tarun Mehta. 

($1 = INR 82.83)

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