Hero MotoCorp's investment
Hero MotoCorp has deepened its stake in electric vehicle manufacturer Ather Energy through a preferential allotment of convertible warrants, investing ₹959.99 crore. The investment consists of 76,19,047 convertible warrants issued at ₹1,260 per warrant, as reported by scanx.trade. The move aligns with Hero MotoCorp's earlier disclosure in July 2026 regarding plans to invest up to ₹1,000 crore in Ather, according to the same source.
The transaction was executed in accordance with the Companies Act, 2013, and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the disclosure made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, scanx.trade reported.
Fundraise details
Ather Energy's board on Tuesday (August 25) approved the allotment of 16.3 lakh equity shares and 79.4 lakh convertible warrants as part of the electric two-wheeler maker's ₹1,200-crore preferential fundraise, CNBC TV18 reported.
The company allotted 16.3 lakh fully paid-up shares to the India-Japan Fund, represented by the National Investment and Infrastructure Fund (NIIF), at ₹1,230 apiece. The investment is worth about ₹200 crore, according to an exchange filing cited by CNBC TV18.
Hero MotoCorp, Ather's largest shareholder, was allotted 76.2 lakh convertible warrants at ₹1,260 each, representing an investment of nearly ₹1,000 crore if the warrants are fully converted into shares. Ather co-founders Tarun Mehta and Swapnil Jain were allotted 1.59 lakh warrants each at the same price, amounting to about ₹20 crore each, CNBC TV18 reported.
"The fundraise will therefore largely come from Hero MotoCorp, further increasing the two-wheeler major's ownership of Ather," CNBC TV18 noted.
Payment terms and stake changes
Under the terms of the issue, investors are required to pay 25% of the warrant price upfront, with the remaining 75% payable when they choose to convert the warrants into equity, both sources reported. The warrants can be converted into shares in one or more tranches within 18 months of allotment, CNBC TV18 reported.
scanx.trade added that Hero MotoCorp paid an initial tranche of ₹239.99 crore, representing 25% of the total issue price, on August 25, 2026. The remaining 75% is not immediately due and will be triggered only when Hero MotoCorp exercises its option to convert the warrants into equity shares. This deferred payment structure allows the investor to defer the bulk of the capital outflow until a later date, contingent on the exercise of the warrants.
Following the transaction, Hero MotoCorp's stake in Ather is set to increase to 29.88% from 28.69% on a fully diluted basis, CNBC TV18 reported. The India-Japan Fund's holding will rise to 5.87% from 5.60%, while the holdings of Mehta and Jain will each decline slightly to 4.73% from 4.80%, the same source said.
The new shares issued by Ather will be listed on the NSE and BSE after required approvals, but the warrants themselves will not be listed, CNBC TV18 reported. The company's paid-up equity share capital will increase to ₹39.61 crore from ₹39.45 crore following the allotment to the India-Japan Fund.
Ather's financial performance and market reaction
Ather reported a net loss of ₹50.87 crore on revenue of ₹1,217 crore in its latest quarter, CNBC TV18 reported. The company's shares closed nearly 1% lower at ₹1,439.40 on the NSE on Tuesday, according to the same source.
Dividend withholding
In a separate development, Hero MotoCorp has withheld the final dividend for FY26 from certain shareholders who have not updated their bank or Know Your Customer (KYC) details, scanx.trade reported. The company cited regulatory changes mandating electronic dividend payments as the reason for the hold.
SEBI amended its listing regulations effective November 19, 2025, discontinuing the payment of dividends through 'payable-at-par' warrants or cheques. A SEBI master circular dated February 6, 2026 mandated that security holders with physical shares must update their KYC details, the same source said.
Affected shareholders must update their bank details or submit forms such as ISR-1, ISR-2, SH-13, or ISR-3 to receive withheld dividends. The withheld dividends will be released only after bank and KYC details are confirmed. The record date for the FY26 final dividend is July 24, 2026, scanx.trade reported.