Ather Energy is preparing for its next phase of growth with a major fundraising plan, expansion of its manufacturing capacity, and the launch of new electric scooters. The electric two-wheeler company has approved a proposal to raise up to Rs 2,500 crore to support its future business plans, even as it reports strong sales growth and improved financial performance.
The fresh funds will help Ather increase production, invest in research and development (R&D), and introduce new products for a wider range of customers. The company is also working to overcome supply chain issues and policy-related challenges while strengthening its position in India’s growing electric vehicle (EV) market.
Hero MotoCorp invests more as Ather plans fresh fundraising
Ather Energy’s board has approved raising up to Rs 2,500 crore through different funding options. The company plans to raise up to Rs 1,500 crore through a Qualified Institutional Placement (QIP), while the remaining Rs 1,000 crore may come through preferential allotments, rights issues, or foreign currency convertible bonds (FCCBs).
The first round of fundraising will bring in Rs 1,200 crore. Hero MotoCorp will invest Rs 960 crore through convertible warrants, increasing its stake in Ather from 29.48% to 30.68%.
The India-Japan Fund, managed by NIIFL for the Government of India, will invest Rs 200 crore, taking its shareholding to 6.02%. Ather’s founders, Tarun Mehta and Swapnil Jain, are also investing Rs 20 crore each through convertible warrants, showing their confidence in the company’s future.
Interestingly, Ather still had Rs 1,617.07 crore left from its Rs 2,626 crore Initial Public Offering (IPO) as of March 31, 2026. Even so, the company is raising more money to speed up its expansion plans and strengthen its technology as competition in the EV market continues to increase.
Strong sales, better financial results and bigger production plans
FY2026 has been Ather’s strongest financial year so far. The company sold 262,942 electric scooters during the year, a 69% increase compared to FY2025. Revenue also grew by 66% to Rs 38.23 billion.
At the same time, Ather reduced its losses. Net loss came down to Rs 5.17 billion from Rs 8.12 billion a year earlier, while EBITDA loss almost reduced by half to Rs 2.57 billion.
Much of this growth came from the strong demand for the Rizta family scooter. In May 2026 alone, Ather sold 26,857 scooters, up 67% compared to the same month last year. The company has also simplified its premium scooter range by bringing its older 450 variants under the single Ather 450 lineup.
To meet rising demand, Ather is building its new “Factory 3.0” in the AURIC industrial city at Chhatrapati Sambhajinagar, Maharashtra. The company’s Hosur factory is already running at more than 90% capacity, making expansion necessary.
Once completed, the new plant will be able to produce 10 lakh scooters every year. The first phase will add production capacity for 5 lakh scooters annually, allowing Ather to build around 42,000 more scooters every month. The factory was expected to start operations in July 2026, but environmental clearance delays have pushed the opening to October 2026.
Ather is also getting ready to launch its new EL platform on August 29, 2026, during Ather Community Day in Bengaluru. The new platform is designed for the mass-market segment with scooters priced below Rs 1.15 lakh. To keep prices affordable, the company has used a steel chassis instead of aluminium and chosen simpler parts such as a belt drive and drum brakes.
Supply chain problems and policy challenges continue
While Ather is growing quickly, it is still facing a few challenges.
The company has been affected by a shortage of heavy rare earth magnets after China placed export restrictions on these materials. These magnets are important for making electric vehicle motors, and the shortage is expected to affect Ather’s production during the current quarter.
Because of this issue, some motor suppliers had to temporarily move away from local sourcing rules under the government’s Phased Manufacturing Program. As a result, Ather has delayed claiming Rs 26.25 crore in incentives under the PM E-DRIVE scheme, affecting around 52,500 scooters. The company also has to prepare for the end of PM E-DRIVE subsidies, which are scheduled to end in March 2026.
Another challenge is that Ather is currently not part of the government’s Auto Production Linked Incentive (PLI) scheme because it does not meet the required global revenue criteria. According to the company, this puts it at a cost disadvantage compared to larger automobile manufacturers that receive PLI benefits. Discussions on possible changes to the scheme are expected to continue.
Along with equity funding, Ather is also looking at low-interest loans through the government’s Research, Development and Innovation (RDI) programme to support its R&D activities. The company has also partnered with green-focused NBFC Ecofy in a Rs 100 crore financing deal that will offer customers retail loans, leasing options, and Battery-as-a-Service (BaaS), making electric scooters easier to own.
With fresh investments, higher production capacity, and new affordable scooters on the way, Ather Energy is preparing for its next stage of growth while dealing with changing market conditions and increasing competition in India’s electric vehicle industry.