Ather Energy secures Rs 1,200 Cr from Hero MotoCorp, IJF, and founders

Electric two-wheeler manufacturer Ather Energy has approved a preferential fund raise of up to Rs 1,200 crore, bringing in fresh capital from existing backers Hero MotoCorp, the India-Japan Fund and the company’s founders.

The Bengaluru-based company will issue equity shares worth about Rs 200 crore to the India-Japan Fund, which is managed by the National Investment and Infrastructure Fund (NIIF), while Hero MotoCorp will invest Rs 960 crore through convertible warrants. Co-founders Tarun Mehta and Swapnil Jain will each invest Rs 20 crore through warrants. The proposal remains subject to shareholder and regulatory approvals.

The latest fundraising forms part of Ather’s broader board-approved plan to raise up to Rs 2,500 crore. According to the company, the larger capital programme is intended to support manufacturing expansion, research and development, new product development and general corporate purposes.

Founded in 2013 by IIT Madras graduates Mehta and Jain, Ather Energy develops electric scooters, battery technology, charging infrastructure and connected software. Its product portfolio includes the 450 series and the family-focused Rizta scooter, while its Ather Grid network provides fast-charging facilities across multiple Indian cities.

The company has positioned itself as a technology-led electric mobility player by combining hardware with software features such as navigation, over-the-air updates and connected vehicle services.

Under the preferential allotment, the India-Japan Fund will subscribe to 16.26 lakh equity shares for nearly Rs 200 crore. Hero MotoCorp will subscribe to 76.19 lakh convertible warrants worth about Rs 960 crore, while Mehta and Jain will each subscribe to 1.59 lakh warrants valued at Rs 20 crore. The warrants can be converted into equity shares within 18 months, with 25% of the subscription amount payable upfront and the balance due at the time of conversion.

The transaction also reinforces the long-standing relationship between Ather and Hero MotoCorp, which is already the company’s largest shareholder. Following full conversion of the warrants, Hero’s holding would rise modestly to around 30.7% on a fully diluted basis, while the India-Japan Fund’s stake would increase to just over 6%.

The India-Japan Fund is a bilateral investment platform backed by the Government of India and the Government of Japan, with NIIF serving as its investment manager. The fund focuses on long-term investments in sectors including infrastructure and manufacturing, making Ather’s electric mobility business a strategic fit with its investment approach.

The fundraising comes at a time when India’s electric two-wheeler market is becoming increasingly competitive. Manufacturers including TVS Motor, Bajaj Auto, Ather Energy, and Ola Electric are expanding product portfolios and production capacity as electric scooters account for a growing share of new two-wheeler sales.

Government support through initiatives such as the PM E-Drive scheme, which provides demand incentives for eligible electric vehicles, continues to encourage adoption, although manufacturers are increasingly focusing on scale, localisation and profitability rather than subsidies alone.

Capital raising activity has also remained strong across the sector, with Ola Electric recently raising about Rs 780 crore through a qualified institutional placement.

Ather’s own fundraising follows a year of rapid operational growth that included a sharp increase in vehicle volumes, an expanded retail network and work on a new manufacturing facility in Maharashtra.