India's Ather Energy to raise $125 million via share issue, warrants

Ather Energy will raise ₹1,200 crore from existing investors led by Hero MotoCorp and the India-Japan Fund amid rising competition in India's EV market

Electric two-wheeler maker Ather Energy on Wednesday said its board approved a 12 billion rupee ($124.70 million) capital raise ​via preferential issue of shares and convertible warrants.

Shares ​of the company jumped by about 8% to 1,292 rupees apiece.

Here ‌are more details:

• The fundraise will be backed entirely by existing investors, led by Hero MotoCorp, the India-Japan Fund and Ather co-founders.

• Ather will issue 1.63 million equity shares to the India-Japan Fund, a joint government-backed investment vehicle managed by the National Investment and Infrastructure Fund, at 1,230 rupees apiece.

• Hero MotoCorp will invest 9.60 billion rupees through warrants, Ather disclosed in an exchange filing.

 

• The motorcycle-maker and Ather's largest shareholder, on Tuesday, had ‌approved an investment of up to 10 billion rupees in the company.

• Ather co-founders Tarun Mehta and Swapnil Jain will each invest about 200 million rupees through convertible warrants.

• Following the issue, Hero MotoCorp's stake will increase to 30.68% from 29.48%, while India-Japan Fund's holding will rise to 6.02% from 5.75%. The co-founders' stake drops to ​4.85% each from 4.93%.

• While Ather Energy did not specify how they would deploy ‌the proceeds, EV makers typically require significant capital for new product development, battery technology, and expanding manufacturing, especially at a ​time ‌when competition in the sector is growing.

• Fundraise coincides with a period of ‌heightened action in India's electric two-wheeler sales, with EV penetration crossing 10% for the first time in June, according to an auto ‌dealers' ​body, as fuel ​price hikes and regulatory push act as tailwinds for the segment.

• Ather is the third-largest Indian electric two-wheeler maker as ‌of June, according ​to Vahan data.