Hero MotoCorp Ltd.'s board has approved an investment of Rs 550 crore in electric two-wheeler maker Ather Energy Pvt.'s rights issue.
The Splendor-maker, which currently holds 33.1% of Ather, will see its shareholding rise in the company. The transaction is expected to be completed before the end of September.
The exact increase in Hero MotoCorp's shareholding in Ather will be known after the rights issue concludes.
Ather currently sells the 450X and 450S in the Indian market. It recorded sales of 6,620 units in July, with a market share of 0.5% in the overall two-wheeler market, data from the Federation of Automobile Dealers Associations showed.
It had a turnover of Rs 1,806 crore in fiscal 2023, up manifold from Rs 414 crore in FY22.
The fundraise comes at a juncture when the electric two-wheeler industry is going through a rough patch after the FAME-II subsidies were reduced, limiting the sector's growth.
Several scooter-makers have also underlined existential challenges after the government withheld disbursal of subsidies, accusing the manufacturers of flouting norms with regards to using locally manufactured parts in their vehicles.
Well-funded competitors—such as Ola—have gone ahead to capture the lion's share of the market, along with the launch of several new models.
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.
