Prime Highlights
- Government of India invests Rs 200 crore in Ather Energy’s Rs 1200 crore fundraise.
- Hero MotoCorp leads investment with Rs 960 crore in convertible warrants.
Key Facts
- Ather Energy shares surge 9 percent on fundraise announcement.
- Ather Energy ranks third in electric two-wheeler market with 16.2 percent share.
Background
The Government of India will invest Rs 200 crore in Ather Energy’s proposed Rs 1,200 crore fundraise, joining the company’s founders and existing shareholder Hero MotoCorp in backing the electric two-wheeler maker.
The India-Japan Fund (IJF) will channel the investment. The Government of India and the Japan Bank for International Cooperation (JBIC) jointly created this $600 million bilateral fund, which the National Investment and Infrastructure Fund Ltd (NIIFL) manages.
According to the company’s stock exchange filing, IJF will subscribe to equity shares worth Rs 200 crore as part of the preferential issue. Hero MotoCorp will invest Rs 960 crore through convertible warrants, while Ather Energy’s co-founders Tarun Mehta and Swapnil Babanlal Jain will together commit Rs 40 crore, each subscribing to 1,58,730 convertible warrants worth Rs 20 crore.
The Rs 1,200 crore preferential issue marks the first tranche of Ather Energy’s broader Rs 2,500 crore fundraising programme, approved by the company’s board in June.
The plan includes raising up to Rs 1,500 crore through a qualified institutional placement, with the remaining amount to be raised through the preferential issue and other permissible routes.
Hero MotoCorp, which holds a 29.48 percent stake in Ather Energy, separately approved an investment of up to Rs 1,000 crore in the company, with the transaction expected to close within 15 days of final approval.
Ather Energy shares rose 9 percent to trade at Rs 1,309.7 apiece following the announcement. The company held the third position in India’s electric two-wheeler market with 29,422 registrations, registering 79.5 percent year-on-year growth. Ather Energy’s market share climbed to 16.2 percent from 14.7 percent recorded a year earlier.