Hero MotoCorp's board has approved an investment of ₹550 crore in Ather Energy Pvt Ltd. India's largest two-wheeler maker already owns a significant stake in the Bengaluru-based electric vehicle start-up.

Hero MotoCorp-backed Ather is engaged in the business of designing, manufacturing, selling, and servicing electric two-wheelers. Besides, Ather also has its own charging infrastructure and is engaged in storage, distribution and management of electric power (including energy in the form of batteries) and other ancillary services. Ather's turnover for the year ended March 2023 was ₹1,806.1 crore.

"The transaction is in the nature of subscription in the rights issue of the associate company, therefore, this would be a related party transaction," Hero MotoCorp says in a stock exchange filing.

This is not an acquisition, but a subscription by Hero MotoCorp, in the rights issue of Ather. The investment is being made in Series E2 Compulsory Convertible Preference Shares.

Prior to the proposed investment, Hero MotoCorp's shareholding in Ather stood at 33.1% (on a fully diluted basis) of the paid-up share capital of Ather. Post the subscription, Hero MotoCorp's shareholding in Ather will increase.

The exact shareholding will be determined upon completion of the fundraising round by Ather, the two-wheeler maker says.

Hero MotoCorp dispatched 488,717 units in August 2023. The company had sold 462,608 units in the corresponding month of the previous year. "There is a likelihood of uptick in customer demand heading into the festive season. The better monsoon across most parts of the country and the decent agricultural activity is also likely to contribute towards positive customer sentiments," the company said on September 1.

Hero MotoCorp further bolstered its premium motorcycle segment, with the launch of Karizma XMR at an introductory price of ₹1,72,900 (ex-showroom Delhi). Hero MotoCorp, which launched its Vida 1 electric scooter last year, plans to have a presence in at least 100 cities in terms of EVs by December, Hero MotoCorp CEO Niranjan Gupta told Fortune India. Hero MotoCorp plans to launch electric vehicles in the mid-segment and affordable segment by FY25.

The company also introduced the new Glamour in a fresh avatar in the month of August. The new Glamour comes with Hero MotoCorp's idle stop-start system, digital console, real-time mileage indicator and mobile charging port.

The Harley-Davidson X440 motorcycle – co-developed by Hero MotoCorp and the iconic American motorcycle maker – received an overwhelming customer response with 25,597 bookings by the time of closure of the first round of pre-bookings on August 8. Customer deliveries of the motorcycle will commence in October.

Pawan Munjal, executive chairman of Hero MotoCorp, had earlier said the launch of the Harley-Davidson X440 is a "significant milestone" in the auto major's premium journey. "The motorcycle brings the best of the iconic Harley Davidson’s signature elements with the manufacturing expertise and trusted quality of Hero," he had said.

Hero MotoCorp Ather

Hero MotoCorp to invest ₹550 cr in Ather Energy