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Hero Motocorp is set to relinquish its special rights in Ather Energy following the latter’s upcoming initial public offering (IPO). According to Ather’s IPO prospectus, Hero currently holds several preferential rights, including the ability to appoint a board observer and access to sensitive company information, such as minutes of board meetings.

However, in compliance with the Securities and Exchange Board of India’s (SEBI) listing regulations, these privileges will be forfeited after the listing, ensuring that all shareholders are treated equally and no investor retains special rights.

“Upon the commencement of listing and trading of the equity shares on the stock exchanges pursuant to the Offer, the SHA (Shareholder’s Agreement), along with all rights available to the parties, shall stand automatically terminated without requiring any further action,” Ather said in the offer document.

Hero MotoCorp is the company’s largest shareholder with 37.2 percent followed by GIC (Caladium Investment) and India-Japan fund hold 15.04 percent and 10.29 percent, respectively.

The India-Japan Fund is represented by NIIF and it separately holds around 6.60 percent. The company’s cofounders Tarun Sanjay Mehta and Swapnil Babanlal Jain hold 6.63 percent each. Tiger Global holds around 6.39 percent shares.

“When you raise money from a big industry player, especially one who’s also a competitor, you're not just getting capital, you're also signing up for a complex relationship. Ather giving Hero special rights like board observation and information access isn’t unusual.” Said Prachi Shrivastava, Founder, Vakil Vetted.

Hero MotoCorp first came on board as an investor in Ather Energy in October 2016, investing around Rs 205 crore (approximately $30 million) during the startup’s Series B funding round. At that time, Hero acquired a stake of about 26–30%, marking its early bet on India’s nascent electric vehicle sector. Since then, Hero has steadily increased its shareholding in Ather through multiple rounds of investments and rights issues. As of 2024, following additional infusions, Hero MotoCorp’s stake in Ather is poised to rise to nearly 37 percent.

Legal experts say, this is a positive development on the governance front for Ather since Hero Motocorp is also engaged in the business of producing electric scooters under the brand name Vida. As of March 2025, While Ather has a market share of 12.3%, Vida has a market share of 2%.

As of March, Bajaj Auto is the largest e-scooter maker in the country with a market share of followed by 25.8%, TVS iQube followed closely, capturing 22.6% of the market and Ola Electric recorded a 19.4% share, as per data available on the government-owned Vahan website.

In the past, there have been cases especially before India’s anti-trust regulator the Competition Commission of India(CCI) where information rights were construed as control.

“Regulatory bodies have previously viewed certain cumulative rights as potentially amounting to indirect control, highlighting the importance of structuring such arrangements with clarity and caution.” Said Tushar Kumar, Advocate, Supreme Court of India.

Additionally, Ather should continue to put in place mechanisms to ensure any potential conflict of interests since Hero continues to be an investor in the company, legal experts added.

“In order to mitigate potential risks, Ather Energy should consider implementing robust internal protocols to prevent the unintended disclosures of sensitive information to Hero MotoCorp. This includes establishing clear boundaries regarding the extent of information accessible to Hero MotoCorp, ensuring that it is limited to what is necessary for its role as an investor.” Said Pranav Bhaskar, partner and head of corporate practice, SKV Law Offices.

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