Kinetic Engineering, the flagship company of Kinetic Group, announced that its Board has approved raising over INR 54 crore from various available sources, including promoters & sale of its non-core assets. Accordingly, the Board approved the issue of 22.85 lakh equity shares on a preferential basis to promoters and promoter group companies totalling INR. 26.27 crore for INR 115 per share (including a premium of INR 105 per share).
According to a communication from the company, this is the third year in which promoters have increased their stake in the company, which will stand at 59.35%. The previous year’s conversion included 9,95,000 shares in FY22 and 11,72,879 shares in FY23. In addition, the Board further approved Optionally Convertible Cumulative Preference Shares (OCCPS) totalling INR 2.18 crore to Jayashree Firodia Trust, part of the promoter group. In this manner, nearly INR 28 crore shall be raised by the company through equity, significantly increasing its net worth.
In addition, the Board also approved the sale of excess land parcels of the company at a consideration of INR 25.50 crore, after following due process, including valuation done by a registered valuer.
Ajinkya Firodia, Managing Director, Kinetic Engineering, said that the company has completed its restructuring of auto-components, turned around its operations over the past three years, and achieved continuous growth in net profit during the last couple of years. 'Now we strongly believe the time has come to cash in on all the efforts, learnings and opportunities that lie ahead in our current business and future potential,' he said.
These funds will be utilised to build a healthy balance sheet by further reducing the debt of INR 18 crore; build a strong auto-component business by revamping the facilities, investing in new equipment, investing for new business and in working capital & capex in KEL to the tune of INR13 to 15 crore; build a strong future in EV by capitalising its subsidiary company, Kinetic Watts & Volts (KWV), with an additional equity of INR 22 to 23 crore.
He further explained, 'In the current business, existing customers including prestigious players such as Mahindra & Mahindra and American Axle have indicated various new business opportunities in transmission and axle domain. Further the company is in process of adding new customers including Sonalika tractors and Case New Holland. It is also bullish on the new product line of making chassis for two/three-wheelers beginning with the very exciting project for E-Luna. All these opportunities require a focus on revamping the facilities, working capital, new machinery and capacity enhancement.'
Besides, KWV will continue to tap opportunities in the booming EV space, where it has already developed axles, chassis and various other parts. It recently revived and restructured its paint shop and CED shop to offer fully painted body parts to EV players. Various other plans in EV space are underway and shall be revealed in a stepwise manner as they fructify, he added.
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