Hero MotoCorp’s Strategic Investment in Ather Energy
Introduction:
:In a strategic move, Hero MotoCorp, led by Pawan Munjal, is set to increase its investment in Bengaluru-based electric vehicle (EV) startup Ather Energy. The automotive giant plans to acquire an additional 3% stake in Ather, amounting to INR 140 Crores (approximately $16.8 Million). This move follows Ather’s recent funding round where it raised INR 900 Crores (around $108 Million) from existing shareholders, including Hero MotoCorp and Singapore’s GIC, through a rights issue.
Stake Increase and Financial Impact:
Upon completion of this deal, Hero MotoCorp’s stake in Ather Energy will rise from the current 36.6% to 39.7%. The company disclosed this information in a regulatory filing on Thursday (December 14). The filing stated, “Currently, HMCL’s shareholding in Ather is 36.7% (on a fully diluted basis) of the paid-up share capital of Ather. Post the purchase of additional shares, HMCL’s shareholding in Ather would increase to 39.7% (on a fully diluted basis) of the paid-up share capital of Ather.”
This move demonstrates Hero MotoCorp’s commitment to strengthening its presence in the electric vehicle segment, aligning with the global shift towards sustainable and eco-friendly transportation.
Ather Energy’s Recent Financial Performance:
Despite the positive investment news, it’s noteworthy that Ather Energy reported a net loss surge of over 150% in the fiscal year 2023. This indicates the challenges and competitive landscape within the electric vehicle industry. However, Ather Energy’s ability to secure substantial funding from existing investors like Hero MotoCorp underscores investor confidence in the startup’s long-term potential and the overall growth trajectory of the electric mobility sector.
Closing Thoughts:
Hero MotoCorp’s decision to increase its stake in Ather Energy is a testament to the growing collaboration between traditional automotive giants and innovative electric vehicle startups. As the world transitions towards a greener future, partnerships like these will play a pivotal role in shaping the landscape of the automotive industry. This move not only signifies Hero MotoCorp’s belief in Ather Energy’s vision but also highlights the continued evolution and dynamism within the electric vehicle ecosystem.