Hero MotoCorp To Funnel Rs. 550 Crore In Ather Energy By CIOTechOutlook Team

Hero MotoCorp To Funnel Rs. 550 Crore In Ather Energy

CIOTechOutlook Team | Tuesday, 05 September 2023, 08:45 IST

The board of directors of Hero MotoCorp has authorized a 550 crore investment in Ather Energy Pvt Ltd. The country's top two-wheeler manufacturer already has a substantial interest in the Bengaluru-based electric car start-up.

Hero MotoCorp-sponsored Ather is a company that designs, manufactures, sells, and services electric two-wheelers. In addition, Ather has its own charging infrastructure and is involved in the storage, distribution, and control of electric power (including energy in the form of batteries) as well as other auxiliary services. Ather's revenue for the fiscal year ending March 2023 was 1,806.1 crore.

"The transaction is in the nature of subscription in the rights issue of the associate company, therefore, this would be a related party transaction," Hero MotoCorp says in a stock exchange filing.

This is not an acquisition, but rather a subscription to Ather's rights issue by Hero MotoCorp. The funds will be invested in Series E2 Compulsory Convertible Preference Shares. Prior to the proposed transaction, Hero MotoCorp controlled 33.1% (on a fully diluted basis) of Ather's paid-up share capital. Hero MotoCorp's stake in Ather will grow following the subscription.

According to Ather, the exact stake will be established once the funding round is completed.

In August 2023, Hero MotoCorp delivered 488,717 units. In the previous year's equivalent month, the corporation sold 462,608 units. "There is a possibility of an increase in customer demand as the holiday season approaches." The firm stated on September 1 that "the better monsoon across most of the country, as well as the decent agricultural activity, is likely to contribute to positive customer sentiments."