Ather Energy Brought Nearly Rs 400 Crore Loss For Hero MotoCorp In FY24
IPO-bound Ather Energy Ltd. continues to be a drag on investor Hero MotoCorp Ltd.'s financials but that hasn't stopped India's largest two-wheeler maker from making larger bets on the EV startup.
In the fiscal ended March 31, 2024, Ather Energy's loss attributable to Hero MotoCorp stood at 389.77 crore on a consolidated basis, as against Rs 192.5 crore in the year-ago period, according to the latest annual report released by Splendor maker.
Ather Energy is an associate company of Hero MotoCorp, holding more than 40% stake in the electric scooter maker. Together, they operate India's largest EV charging network with more than 2,000 fast-charging stations across 200 cities.
While Ather Energy hasn't released its financials for FY24, Hero MotoCorp's annual report showed that its loss widened to Rs 1,060 crore from Rs 864 crore in FY23. Revenue was largely flat at Rs 1,789.10 crore in FY24 versus Rs 1,783.60 crore in FY23.
That hasn't stopped Hero MotoCorp from increasing its stake in Ather Energy.
In FY24, the New Delhi-based automaker invested nearly Rs 700 crore to increase its stake in Ather Energy to 43.94% (40.89% on fully diluted basis) from 36.54% (33.11% on a fully diluted basis) in FY23. In September 2023, Hero MotoCorp pumped in Rs 550 crore as part of a larger Rs 900-crore rights issue, which also saw the participation of Singapore's GIC Pte Ltd. In December 2023, a further Rs 140 crore was invested for 3% more stake.
The pace of investment has continued in FY25 as well.
In June, Hero MotoCorp invested Rs 124 crore in Ather Energy to pick up an additional 2.2% stake on a fully diluted basis. According to an ETtech report, the funding happened at an inferred valuation of Rs 5,636 crore—a premium over the Rs 4,666 crore pegged at the end of the December 2023 round.
The financials assume significance, for they come amid talks of an Ather Energy IPO. The electric scooter maker plans to file draft papers for an initial public offering to raise about $400 million at a valuation of $2 billion, NDTV Profit had reported earlier.
According to Bloomberg, HSBC Holdings Plc, Nomura Holdings Inc. and JPMorgan Chase & Co. are arrangers for the Ather Energy IPO. Local banks, including JM Financial Ltd. and Axis Bank Ltd., could also be involved as book-running lead managers.
Founded by IIT Madras graduates Tarun Mehta and Swapnil Jain in 2013, Ather Energy is involved in the business of electric two-wheelers as well as charging infrastructure. Hero's maiden electric scooter, Vida V1, is compatible with Ather Energy's charging network. The company, at present, retails three electric scooters: the Ather 450X, 450S and Rizta.
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