Hero MotoCorp Strengthens Electric Vehicle Play with Ather Energy Stake Increase

Hero MotoCorp Limited, India’s leading two-wheeler manufacturer, announced on June 6, 2024, a strategic move to further solidify its presence in the electric vehicle (EV) space. The company’s Board of Directors approved the purchase of additional shares in Ather Energy Private Limited, a prominent player in the Indian EV market.

This investment underscores Hero MotoCorp’s commitment to the future of mobility. Ather Energy, established in 2013, boasts a strong reputation for designing, manufacturing, and selling electric scooters along with the supporting charging infrastructure. Their business also encompasses software development and management specific to electric vehicles, further solidifying their position as a comprehensive EV solution provider.

Building on Existing Partnership

This transaction doesn’t require government or regulatory approvals as Hero MotoCorp is already an existing investor in Ather Energy. The additional shares, representing approximately 2.2% stake, will be acquired through a secondary purchase from another existing shareholder for a cash consideration of ₹124 crore. The acquisition is expected to be completed by July 31, 2024.

Strategic Significance

This move highlights Hero MotoCorp’s proactive approach to capturing a significant share of the rapidly growing Indian EV market. Ather Energy’s established brand, technological expertise, and expanding national presence make it a valuable partner. By increasing their stake, Hero MotoCorp gains greater influence in Ather’s strategic direction and future product development. This collaboration holds immense potential to accelerate both companies’ growth in the burgeoning electric two-wheeler segment.

Recently, the company announced its monthly sales for May 2024, in which it recorded sales of 4,98,123 units of motorcycles and scooters, compared to 5,19,474 units in May 2023. The company sold 10,31,708 units in the first two months (Apr-May 2024) of the financial year FY 2025, registering a growth of 12.6% over the corresponding months (Apr-May 2023), when the company sold 9,15,581 units.

About Hero MotoCorp Limited

Hero MotoCorp Limited is a two-wheeler manufacturer. It manufactures and sells motorised two-wheelers with up to 350 cubic centimetres (cc) engine capacity, spare parts, and related services. On June 07, 2024, Hero MotoCorp’s share price opened at ₹5,599.15 and touched the day high of ₹5,636.35 at 10:55 AM.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.