Ather Energy’s EV push: Govt to invest ₹200 crore; top shareholder Hero MotoCorp to pump in ₹960 crore

The central government will invest ₹200 crore in electric two-wheeler manufacturer Ather Energy as part of the company's proposed ₹1,200-crore preferential fundraising, according to a stock exchange filing dated 15 July.

The investment will be routed through the India-Japan Fund (IJF), a $600 million (around ₹4,900 crore) bilateral investment vehicle jointly established by the Government of India and the Japan Bank for International Cooperation (JBIC). The fund is managed by the National Investment and Infrastructure Fund Ltd (NIIFL).

According to Moneycontrol, the government's investment will be made alongside fresh capital from Ather's founders and existing investor Hero MotoCorp.

Under the preferential issue, the India-Japan Fund will subscribe to equity shares worth ₹200 crore, while Hero MotoCorp will invest ₹960 crore through convertible warrants.

Ather Energy's co-founders, Tarun Mehta and Swapnil Babanlal Jain, will each contribute ₹20 crore by subscribing to 1,58,730 convertible warrants, taking the founders' combined investment to ₹40 crore.

The ₹1,200-crore preferential allotment marks the first phase of Ather Energy's previously announced ₹2,500-crore capital-raising plan, which received board approval in June.

Under the broader fundraising strategy, the company plans to raise up to ₹1,500 crore through a qualified institutional placement (QIP), with the remaining amount to be mobilised via a preferential issue, rights issue or other approved fundraising routes. While the preferential tranche has now been executed, the company is yet to announce details of the QIP.

Ather Energy's expansion plan

On 12 June, Ather Energy's board approved raising up to ₹2,500 crore to support the company's expansion plans.

As disclosed to the stock exchanges, the proposal includes ₹1,500 crore through a QIP and another ₹1,000 crore through a preferential issue, rights issue or other permissible instruments. The company also formed a dedicated fundraising committee to oversee the process.

Separately, on 14 July, Hero MotoCorp, Ather's largest shareholder, approved an investment of up to ₹1,000 crore in the Bengaluru-based electric vehicle maker.

Hero said its post-investment shareholding will depend on the final pricing and structure of the securities being issued. As of 30 June, the company held a 29.48% stake in Ather Energy. The investment will be made through a preferential allotment of shares or convertible securities, with the transaction expected to close within 15 days of receiving the required approvals.

Ather's fundraising comes shortly after rival Ola Electric Mobility completed a qualified institutional placement worth around ₹780 crore earlier this month, surpassing its initial target of ₹500 crore, according to the company's 4 June stock exchange filings.