Shares of Ather Energy Ltd experienced a notable rally of 7.10% on Friday's trade, hitting a high of ₹1,579.75 on the BSE. This surge followed substantial block deals where 1,18,80,000 shares of the electric scooter manufacturer were traded at ₹1,480 apiece, aggregating a massive ₹1,758.24 crore.
Hero MotoCorp Identified as Key Buyer
The block deal price represented a mere 1.02% discount to Thursday's closing price of ₹1,495.30 per share. Market speculation points to Hero MotoCorp Ltd as the likely buyer in this large transaction, signaling increased interest and investment in Ather Energy.
Recent Capital Raises and Analyst Outlook
This significant block deal comes shortly after Ather Energy approved several other capital-raising initiatives. Earlier in the week, the company greenlit the allotment of 16,26,016 fully paid-up equity shares to India Japan Fund at an issue price of ₹1,230, amounting to nearly ₹200 crore. Additionally, Ather approved the issuance of convertible warrants to Hero MotoCorp Ltd and Tarun Sanjay Mehta at ₹1,260 each, totaling nearly ₹1,000 crore.
According to Ather Energy's statements, only 25% of the warrant issue price was payable at the time of subscription, with the remaining 75% due upon conversion. Warrant holders have up to 18 months from the allotment date to convert these warrants into equity shares, in one or more tranches.
HDFC Institutional Equities recently commented on Ather's Q1 results, noting the company's impressive progress towards profitability despite commodity headwinds and the absence of PLI benefits. Analysts attribute this to the management's strong focus on cost efficiency, value engineering, and robust R&D capabilities. The upcoming expansion of manufacturing capacity and the launch of the 'EL platform' for more affordably priced products, coupled with improving customer sentiment towards EVs and an expanded dealer network, are expected to create a new inflection point for the company's growth.