Cyril Amarchand Mangaldas: Hero MotoCorp Ather Fundraise Counsel

• Ather Energy Limited completed a fundraise of approximately INR 2500 crore through a preferential issue and a Qualified Institutional Placement (QIP).
• Hero MotoCorp, a promoter of Ather Energy, invested around INR 960 crore in the preferential issue, which totaled approximately INR 1200 crore.
• The remaining approximately INR 1300 crore was raised via a QIP, contributing to the total INR 2500 crore Ather fundraise.
• Cyril Amarchand Mangaldas advised Hero MotoCorp on the structuring, compliance, and documentation for both the Ather Energy preferential issue and the Hero MotoCorp QIP investment.
• The legal team provided expertise on Indian equity financing regulations, particularly concerning a promoter's participation in such multi-tranche capital raises.

This multi-tranche financing, involving both a preferential issue and a Qualified Institutional Placement, underscores the intricate regulatory landscape governing significant capital raises in India, particularly when promoters are key participants.

Ather Energy Limited, a publicly listed entity, recently concluded a substantial capital raise totaling approximately INR 2500 crore. This significant financial injection was structured through a combination of a preferential issue and a Qualified Institutional Placement (QIP), demonstrating a multi-faceted approach to securing growth capital. The preferential issue alone accounted for roughly INR 1200 crore, while the QIP contributed an additional INR 1300 crore to the overall fundraise.

Hero MotoCorp Limited, a prominent promoter of Ather Energy, played a crucial role in this financing round. As part of the preferential issue, Hero MotoCorp invested approximately INR 960 crore. The preferential allocation was directed towards Ather's existing promoters, including Hero MotoCorp, and an institutional shareholder, reinforcing their commitment to the company's future trajectory. This strategic investment by Hero MotoCorp underscores its continued support for Ather Energy's expansion and operational goals.

Cyril Amarchand Mangaldas (CAM) provided comprehensive legal counsel to Hero MotoCorp Limited throughout the intricate fundraise undertaken by Ather Energy. Their advisory mandate encompassed critical aspects of structuring the transaction and ensuring meticulous compliance with all applicable legal and regulatory requirements governing such capital market activities in India. This involved detailed guidance on the nuances of both the preferential issue and the Qualified Institutional Placement.

CAM's role extended to the negotiation and finalization of essential documents and disclosures pertinent to the preferential issue. Furthermore, the firm advised Hero MotoCorp on matters related to the Qualified Institutional Placement, specifically addressing its position and obligations as a promoter of Ather Energy. This multi-tranche financing, involving both a preferential issue and a Qualified Institutional Placement, underscores the intricate regulatory landscape governing significant capital raises in India, particularly when promoters are key participants.

The successful execution of this fundraise highlights the specialized legal expertise required for complex Indian equity financing regulations. The advisory team from Cyril Amarchand Mangaldas was spearheaded by Partners Ruetveij Pandya and Abhilasha Malpani, who provided overall leadership for the transaction. Their guidance was instrumental in navigating the various legal and compliance hurdles inherent in a deal of this magnitude.

Further specialized counsel on the Qualified Institutional Placement aspects was provided by Partners Manan Lahoty, who heads the firm's Capital Markets practice, and Abhiroop Lahiri. The broader transaction team included Senior Associates Anoushka Ishwar and Manjri Singh, alongside Associates Aanchal Jain, Kiara Dsouza, Keerti Singh, and Simran Srivastava. This collective expertise was vital in ensuring that Hero MotoCorp's investment and Ather Energy's fundraise adhered to all necessary corporate governance standards and regulatory frameworks.

This deal highlights the complex legal and regulatory considerations for multi-tranche fundraises in India, particularly when involving both preferential issues and Qualified Institutional Placements (QIPs) with promoter participation. Lawyers advising clients on similar capital-raising strategies should review the structuring and compliance aspects to ensure adherence to SEBI regulations and corporate governance standards.

Source: Original reporting via Cyril Amarchand Mangaldas