Ather Energy has secured ₹1,200 crore from Hero MotoCorp and the India-Japan Fund. The funding will support R&D and the construction of its new 'Factory 3.0' in Maharashtra. This investment increases Hero MotoCorp’s ownership to 30.68%, signaling stronger backing for the electric two-wheeler manufacturer’s expansion plans.
Ather Energy Ltd has received board approval to raise ₹1,200 crore through a new round of funding from its existing investors. This capital injection, consisting of both equity shares and warrants, arrives as the company looks to accelerate its growth in the competitive Indian electric two-wheeler market.
Hero MotoCorp Increases Ownership
Hero MotoCorp, the largest shareholder in Ather Energy, is leading this round with an investment of ₹960 crore. The company will acquire over 7.6 million warrants at an issue price of ₹1,260 each. Upon conversion of these warrants into equity, Hero MotoCorp’s total stake in Ather Energy will rise to 30.68% from its current 29.48%. This steady accumulation of shares reflects a long-term strategic commitment from the traditional two-wheeler giant toward the electric vehicle space.
India-Japan Fund and Promoter Contribution
The India-Japan Fund, backed by the Government of India and the Japan Bank for International Cooperation, will contribute approximately ₹200 crore to the funding round. This investment involves the issuance of over 1.6 million equity shares at ₹1,230 per share. Consequently, the fund's stake in the company will move to 6.02% from 5.75%. Additionally, Ather Energy’s founders, Tarun Sanjay Mehta and Swapnil Babanlal Jain, are each investing ₹20 crore through the purchase of warrants, maintaining their involvement in the company’s capital structure.
Expansion and Factory 3.0 Goals
Ather Energy intends to use these proceeds to strengthen its research and development capabilities, support marketing, and reduce debt. A primary focus of this capital spending is the 'Factory 3.0 project' located in Chhatrapati Sambhajinagar, Maharashtra. This facility is central to the company’s strategy to scale its operations, with a target to reach an annual installed production capacity of 1.42 million units. Successfully commissioning this plant on time will be critical to meeting the rising demand for electric scooters in India.
As the company moves ahead with this expansion, investors may watch the pace of construction at the new facility and the company’s ability to manage costs as it scales production. Because Ather Energy remains a private company, the direct impact on public market investors is indirect, primarily affecting the valuation and future growth prospects of its key investor, Hero MotoCorp. The market will track how effectively the company deploys this capital to increase its market share against competitors such as Ola Electric, TVS Motor, and Bajaj Auto, all of which are actively increasing their presence in the electric two-wheeler segment.