Hero MotoCorp To Buy 2.2% Stake In Ather For INR 124 Cr

SUMMARY

The deal pegs Ather Energy at $675 Mn, lower than the reported $750 Mn valuation at which the EV major raised funds in May 2022

Hero MotoCorp will purchase the additional shareholding from an undisclosed existing investor

This comes a week after Inc42 reported that Ather Energy’s board approved the EV player’s plans to raise INR 286.5 Cr in a mix of equity and debt

Auto giant Hero MotoCorp is acquiring an additional 2.2% stake in two-wheeler electric vehicle (EV) startup Ather Energy for INR 124 Cr in a secondary transaction.

This translates into a valuation of INR 5,635 Cr (about $675 Mn) for Ather Energy. This is lower than the reported $750 Mn valuation the EV startup got during its Series E round in May 2022.

“Investment is being made in the form of purchase of additional shares from an existing shareholder of Ather Energy for acquisition of up to 2.2% shares (on a fully diluted basis),” Hero MotoCorp said in an exchange filing.

The auto major said it will purchase the share from an existing investor of Ather Energy.

This comes six months after Pawan Munjal-led Hero MotoCorp said it would buy an additional 3% stake in the EV startup for INR 140 Cr. At that time, the company said that the 3% stake would increase Hero MotoCorp’s shareholding in Ather Energy to 39.7%.

The fresh fundraise also comes at a time when the startup has been raising back to back rounds. Last week, Inc42 reported that Ather Energy’s board approved its plans to raise INR 286.5 Cr in a mix of equity and debt.

Prior to that in September last year, Ather secured INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue.

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather Energy is a major player in the Indian electric two-wheeler market. It designs, manufactures and services electric two wheelers. It also operates its own charging infrastructure and is involved in storage, distribution and management of electric power and other ancillary services.

As per the exchange filing, Ather Energy’s turnover stood at INR 1,753.8 Cr during the financial year 2023-24 (FY24).

The startup clocked a net loss of INR 864.5 Cr in the financial year 2022-23 (FY23), up 150% from INR 344.1 Cr in the previous year. Meanwhile, operating revenue jumped 4.3X to INR 1,783.6 Cr during the year under review from INR 408.5 Cr in FY22.

Ather Energy is also reportedly eyeing a listing on the bourses as soon as the second half of 2024. It is said to be mulling raising $400 Mn through the public listing at a valuation of $2 Bn.