Ather Energy fundraise: Govt, Hero add Rs 1,200 cr

Board clears Rs 1,200 crore preferential issue

Ather Energy has approved raising up to Rs 1,200 crore through a preferential issue, bringing in capital from the India-Japan Fund, Hero MotoCorp, and the company’s co-founders. The decision was disclosed through regulatory filings dated July 15. The raise is positioned as the first tranche of a broader fundraising programme of up to Rs 2,500 crore that Ather’s board had approved in June. The company has not yet announced the QIP tranche under the larger plan.

The preferential issue structure mixes equity shares and convertible warrants. The India-Japan Fund will participate through equity, while Hero MotoCorp and the founders will subscribe via warrants. The proposal remains subject to shareholder and regulatory approvals, as outlined in the filings. The transaction has been described as targeted to be completed within 15 days of the final approval.

Government investment routed via India-Japan Fund

The Government of India’s participation is set at Rs 200 crore, routed through the India-Japan Fund (IJF). IJF is described as a $100 million bilateral fund set up by the Government of India and the Japan Bank for International Cooperation (JBIC). The fund has been cited at around Rs 4,900 crore in one description and about Rs 5,781 crore in another. It is managed by the National Investment and Infrastructure Fund (NIIF / NIIFL), according to the filings and related reporting.

One account of the fund’s structure says the Government of India contributes 49% of the commitments and JBIC contributes 51%. The fund’s stated focus includes environmental sustainability and low-carbon businesses. Ather is also described as being among at least three electric mobility companies backed by the fund, alongside Mahindra Last Mile Mobility and EKA Mobility.

How the Rs 1,200 crore is split between investors

As per the regulatory details, the Rs 1,200-crore preferential issue allocates Rs 200 crore to IJF via equity shares, Rs 960 crore to Hero MotoCorp via convertible warrants, and Rs 40 crore to the founders via warrants. Hero is already the largest shareholder in Ather and had, on July 14, approved an investment of up to Rs 1,000 crore in the company, with its eventual stake dependent on pricing and the structure of the securities.

Ather’s co-founders Tarun Mehta and Swapnil Babanlal Jain will invest Rs 20 crore each. The filings indicate each founder is being issued 1,58,730 convertible warrants apiece for Rs 20 crore each. The company also disclosed mechanics typical of warrant structures: conversion into equity shares can occur within 18 months, with 25% payable upfront and the balance due at conversion.

Pricing, premium, and securities being issued

The preferential issue includes an issue price that incorporates premium over the face value. Under the allotment to IJF, Ather will issue 16,26,016 fully paid-up equity shares at Rs 1,230 each (face value Re 1 each), including a premium of Rs 1,229 per share. For Hero MotoCorp, the company will issue 76,19,047 warrants at an issue price of Rs 1,260 per warrant, each convertible into one equity share.

In the same set of disclosures, the founders’ warrants are described as being issued at an issue price of Rs 1,230 per warrant for Rs 20 crore each, while other reporting also references promoter warrants being priced at Rs 1,260. The company filing details include Hero’s warrant price of Rs 1,260 and IJF equity price of Rs 1,230.

Key numbers at a glance

Shareholding impact after the preferential issue

Hero MotoCorp held 29.48% in Ather Energy as of June 30, according to the disclosures. Post the preferential issue, Ather said Hero’s holding will increase to 30.68%. Another account notes that following full conversion of the warrants, Hero’s holding would rise to around 30.7% on a fully diluted basis.

For the India-Japan Fund, Ather said its stake will increase to 6.02% from 5.75% after the issue. The founders’ holdings are indicated to reduce marginally to 4.85% each from 4.93% after the preferential allotment.

Why the issue size rose from about Rs 1,000 crore to Rs 1,200 crore

Ather had initially proposed raising about Rs 1,000 crore through a preferential allotment, before expanding it by 20% to Rs 1,200 crore to accommodate IJF’s participation, as described in the filing. The current preferential issue is framed as the first tranche of the company’s larger Rs 2,500-crore fundraising programme approved in June.

The company has yet to announce the QIP tranche under that broader programme. In the context of the fundraising plan, Ather has stated that the larger capital programme is intended to support manufacturing expansion, research and development, new product development, and general corporate purposes.

Use of proceeds and operational context

Ather has indicated multiple uses for the overall fundraise, including research and development, marketing, debt repayment, and general corporate purposes. The filings also refer to the ongoing “Factory 3.0 Project” in Chhatrapati Sambhajinagar, Maharashtra. The project is expected to take Ather’s installed capacity to 1.42 million units annually.

The allocation signals a mix of growth and balance-sheet priorities, given the explicit reference to debt repayment alongside R&D and manufacturing expansion. The warrant structure also spreads cash inflows across the upfront payment and eventual conversion, depending on how and when warrant holders choose to convert within the 18-month window.

Background: NIIF’s earlier Ather investment and partial exit

The India-Japan Fund is reported to have backed Ather earlier as well. One account says the fund first backed the electric scooter maker in 2024, ahead of a stock market listing the following year. Separately, the reporting also notes that in 2024 Ather raised Rs 600 crore from NIIF at a valuation of $1.3 billion, placing it in India’s unicorn category.

The same reporting says NIIF sold 87 lakh Ather shares for about Rs 541 crore in November 2025, representing roughly 49% of NIIF’s holding in the company at the time. This history provides context for why a government-backed platform is again participating in Ather’s capital raise.

Market impact: what investors will track next

For investors and industry watchers, the immediate focus is on completion timelines and final approvals, since the preferential issue remains subject to shareholder and regulatory clearances. Another item to watch is the structure and timing of the still-unannounced QIP tranche under the Rs 2,500-crore fundraising programme.

Hero MotoCorp’s increased exposure, via warrants, also matters because it slightly raises Hero’s stake from 29.48% to 30.68% post issue, according to Ather’s disclosure. The addition of IJF via equity and the founders’ participation adds a clearer signal of continued support from both strategic and government-linked capital. The warrant conversion window of up to 18 months, and the 25% upfront payment requirement, will influence the timing of cash inflows and the path of dilution.

Conclusion

Ather Energy’s Rs 1,200-crore preferential issue brings together Rs 200 crore from the India-Japan Fund, Rs 960 crore from Hero MotoCorp, and Rs 40 crore from the founders, with clearly disclosed pricing and post-issue stake changes. The issue is the first tranche under a larger Rs 2,500-crore fundraising plan, while the QIP component is yet to be announced. Next milestones include shareholder and regulatory approvals, and the company’s update on timelines and structure for the remaining fundraising programme.