Electric two-wheeler manufacturer Ather Energy’s board has approved a preferential issue to raise up to ₹12 billion (~$124.5 million) through a combination of equity shares and convertible warrants.

The fundraising comprises a preferential issue of 1.6 million equity shares at ₹1,230 (~$12.76) per share and 7.9 million convertible warrants at ₹1,260 (~$13.7) per warrant.

The equity shares, aggregating approximately ₹1.99 billion (~$20.64 million), will be allotted to the India-Japan Fund, represented by its investment manager, National Investment and Infrastructure Fund.

The warrants, totaling approximately ₹10 billion (~$103.75 million), will be allotted to Hero MotoCorp and Tarun Sanjay Mehta and Swapnil Babanlal Jain, co-founders of Ather Energy, on a preferential basis.

Hero MotoCorp will subscribe to 7,619,047 warrants worth approximately ₹9.6 billion (~$99.6 million), while Mehta and Jain will each subscribe to 158,730 warrants worth approximately ₹199.99 million (~$2.07 million).

Each warrant will be convertible into one equity share within 18 months from the allotment date.

If all warrants are converted, Hero MotoCorp’s shareholding would increase from 29.48% to 30.68% on a fully diluted basis. The India-Japan Fund’s stake would increase from 5.75% to 6.02%. Mehta’s and Jain’s holdings would each decline from 4.93% to 4.85% on a fully diluted basis.

According to data released by the Ministry of Road Transport and Highways through its Vahan Dashboard, electric vehicle (EV) sales in India reached 837,453 units in the second quarter (Q2) of 2026, a year-over-year (YoY) increase of 52.3% over 549,900 units recorded in the corresponding quarter of 2025. During the quarter, Ather Energy sold 88,465 units.

According to Mercom Capital Group’s Q1 2026 Funding and M&A Report for Energy Storage, smart grid funding has been driven by EV charging companies.

A parliamentary standing committee observed that utilization of the funds allocated under the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement is heavily concentrated in e-2W and e-3W (L5) segments, while capital-intensive areas such as e-buses, charging stations, e-trucks, e-ambulances, and testing upgrades have seen limited or nil expenditure in the initial phase.