Ather Energy board clears ₹2,500 crore fundraising plan
EV maker plans multi-route equity and convertible raise to fund capacity expansion, new products, and growth amid surging demand
Electric two-wheeler maker Ather Energy has approved a proposal to raise up to ₹2,500 crore through a combination of equity and convertible securities, as the company looks to strengthen its balance sheet and support future growth initiatives. In a regulatory filing, the company said its board of directors, at a meeting held on June 12, approved the fundraising plan, which will be executed through multiple routes and in one or more tranches, subject to shareholder and regulatory approvals.
The fundraising plan comes at a time when Ather's existing manufacturing capacity is running close to full utilisation. In a post on X, co-founder and CEO Tarun Mehta said concerns had been raised when the company proposed investing in additional capacity despite operating at just 30-40% utilisation at the time of its draft red herring prospectus (DRHP) filing.
"Fast forward to today: we've crossed 90% utilization and will have to try and find ways to go above 100% in the coming weeks!" Mehta wrote, adding that the company's upcoming "Factory 3.0" facility in Chhatrapati Sambhajinagar “can't go live fast enough".
The comments offer a glimpse into the demand growth Ather has seen over the past year and underscore why the company is looking to bolster its capital base. While Ather has not disclosed the specific use of proceeds from the proposed ₹2,500-crore raise, the fresh funds could provide additional firepower for capacity expansion, product development, retail growth and other strategic investments as competition in India's electric two-wheeler market intensifies.
QIP to account for ₹1,500 crore of the proposed raise
The largest portion of the fundraising, amounting to up to ₹1,500 crore, will be raised through a qualified institutional placement (QIP) of equity shares. The company said the issuance could take place in one or more tranches and on terms to be decided by the board.
In addition, Ather Energy plans to raise up to ₹1,000 crore through a mix of equity shares, foreign currency convertible bonds (FCCBs), or other eligible securities that can be converted into or exchanged for equity shares. The fundraising could be carried out through various permissible routes, including a preferential issue, rights issue, or other methods allowed under applicable regulations.