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NEW DELHI : Tiger Global-backed Ather Energy has raised $128 million ( 990 crore) in a fundraising round led by quasi-sovereign wealth fund National Infrastructure Investment Fund (NIIF) and existing backer Hero MotoCorp Ltd in a boost to the electric scooter maker’s ambitious expansion plans.

Of the total, Hero MotoCorp has invested $56 million (about 420 crore) as the country’s largest two-wheeler maker deepens its presence in green mobility. NIIF contributed most of the remaining investment. Other existing investors in Ather, including angel founders, also took part through minor investments.

Ather is also backed by the founders of Flipkart Sachin Bansal and Binny Bansal besides Hero and Tiger Global.

Hero has been an investor in Ather since October 2016 when it had committed an investment of up to 205 crore for a 26-30% stake in the electric scooter maker.

The latest round marks the debut of infrastructure-focused NIIF in the new-age manufacturing sector in India.

“The EV (electric vehicle) has changed dramatically over the last two years and we need to invest to fuel growth a little ahead of time now," Tarun Mehta, co-founder and chief executive, Ather said in an interview.

“We will need to raise more capital and I see a capital raise once again in the next two years. Given our pace of growth, we want to stay ahead of the curve and will need to raise more money," he added.

Meanwhile, Ather has still to turn a unicorn post the new fundraise. A unicorn refers to startups valued at $1 billion or more. Mehta did not disclose Ather’s latest valuation.

“I believe there is a lot more value in the company. We did our last round of funding at quite a discount because of covid-19, so we have a lot of upsides left for our investors," he said.

Mehta termed NIIF’s maiden investment in new-age manufacturing as a major boost to Ather.

“We were keen to get NIIF on-board for the longest time and are very happy with the quantum of their investment too," he said.

Hero MotoCorp will now own a 35% stake in Ather on a fully diluted basis. Stakes of other investors including NIIF and Mehta could not be immediately ascertained.

Mehta said the investment will be used to scale up production capacity at its second factory, which is expected to open in a few months with an initial capacity of 35,000 scooters a month. Its existing factory can produce up to 10,000 scooters a month. Both plants are located in Hosur, Tamil Nadu.

Ather will use bulk of the fresh fundraise to build capacity at the supply-chain level.

“We buy very few components off-the-shelf. We are investing significantly into scaling up not our own capacity, but in scaling up our supply chain as we require a lot of custom-designed parts, custom tooling," said Mehta.

Ather also plans to invest in building new vehicle and engineering platforms.

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