Indian electric vehicle manufacturer Ather Energy Ltd is gearing up to raise money through an initial public offering. The company hasn’t yet specified the pricing for this proposed event. It will be both a fresh issue as well as an offer for sale, wherein existing shareholders sell their stakes in parallel with new shares issued by the company.
If investors are willing to invest in Ather, a peep into the strategy of Hero MotoCorp Ltd might serve them. Hero MotoCorp is the largest motorcycle manufacturer in India and owns a giant 37% stake in Ather Energy before its IPO. This tie may comfort investors who find Ather a riskier option for investment.
While Ather is important in every respect, it forms only about 3% of the overall value at Hero MotoCorp. That small percentage also speaks to the fact that though Hero has enough concern to see Ather through, Hero’s financials would not be too adversely affected if Ather goes belly up after its public offering. In short, if an investment in Ather feels too risky, Hero’s diversified portfolio can cushion the losses of this one investment.
All of these factors should be well balanced when the investors are deciding. It also forms an opportunity and a risk factor; thus, knowing how investing in Ather perceives Hero MotoCorp’s engagement can change the way investors feel and plan.
Ather Energy IPO is attracting a lot of interest from diversified investors. It is very relieving to the risk-adverse investor’s mind knowing that they have not been completely kept out in the cold since Hero MotoCorp has considered significant holdings to mitigate probable declines.
