Hero MotoCorp has announced plans to subscribe to a rights issue of Bengaluru-based electric scooter manufacturer Ather Energy. Hero MotoCorp, an existing shareholder of Ather Energy, currently has a 33.1% equity stake in the EV maker and will invest up to Rs 550 crore.
With this fresh investment in the EV OEM’s Series E2 Compulsory Convertible Preference Shares, Hero MotoCorp’s stake in Ather Energy will rise above 33.1%, albeit the specific level of increment will be known only after closure of the rights issue.
The fresh investment clearly means the world’s largest two-wheeler OEM has reposed its faith in the dynamic EV start-up, which is currently the third-ranked electric-two-wheeler OEM in India after Ola Electric and TVS Motor Co.
Incorporated in India in October 2021, Ather Energy is engaged in the business of designing, manufacturing, producing, selling, servicing, software development, and software management, in relation to EVs and charging infrastructure, and also storage, distribution, and management systems, or all forms of electric power (including energy in the form of batteries) and other ancillary services.
With over 1,400 chargers located across 100 cities, Ather has India’s largest EV two-wheeler charging network.
FIRMLY PLUGGED INTO INDIA’S EV GROWTH STORY
Since June 2018, when Ather Energy launched two smart electric scooters – the 340 and 450 – in the country, the company has come a long way in a market which is now energetically plugged into electric mobility on two wheels. Two months ago, the OEM launched its newest product – the 450S – powered by a 3 kWh battery pack and is expected to have an IDC (Indian Driving Conditions) range of 115km and a top speed of 90kph. Its starting price is Rs 1,29,999 (exclusive of state subsidy).
In CY2016, 16,301 electric two-wheelers were sold in India. Total sales in CY2022 were 615,365 units – a 3,675% increase over five years. And Ather Energy has benefitted from the countrywide demand for EVs.
This is amply reflected in the pace of growth at Ather Energy – in FY2023, the company sold a total of 93,212 units, which is a 302% year-on-year increase (FY2022: 23,167 units). In the first five months of FY2024, total retails are 41,556 units, which means it has already clocked 44% of FY2023’s record sales with seven months to go for FY2024 to come to a close.
Ather’s strong market performance is reflected in the company’s turnover – Rs 1,806.1 crore in FY2023, up 336% on FY2022’s Rs 413.8 crore. The turnover in FY2021 was Rs 79.8 crore. Hero MotoCorp, which has recently entered the EV arena with its Hero Vida, is bullish on the India EV growth story and its sustained investment in Ather Energy is proof of that.
With a second manufacturing plant at Hosur in Tamil Nadu, Ather Energy has increased its capacity to 420,000 electric scooters per annum.
FUTURE-READY IN CAPACITY, EXPANDING FAST-CHARGING NETWORK
The company is well placed in terms of manufacturing capacity to cater to future demand. On November 23, 2022, Ather Energy inaugurated its second manufacturing plant at Hosur in Tamil Nadu, increasing its capacity to 420,000 units per annum. The new plant, which employs 1,600 personnel, is twice the size of the first plant and has two vehicle and five battery lines. Increased automation levels mean assembly times are down by 20 percent.
Ather Energy is also doing its bit to strengthen and expand the EV charging ecosystem across India with its Ather Grid charging stations. With over 1,400 chargers located across 100 cities, Ather has India’s largest EV two-wheeler charging network. Recently, it has tied up with leading oil marketing company BPCL. Through this strategic collaboration, Ather Energy will gain access to BPCL’s extensive network of over 21,000 fuel stations across India, facilitating the installation of Ather’s public fast-charging Grid. In its initial phase, Ather Energy has installed four fast chargers in Delhi NCR. The company plans to scale up to over 100 fast chargers at BPCL locations across India by the end of the year.
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