Automotive manufacturer Kinetic Engineering Limited (KEL) plans to raise ₹40-50 crore to set-up an electric vehicle (EV) subsidiary. The company has shortlisted the bid too, Ajinkya Firodia, Managing Director, Kinetic Engineering Limited told CNBC-TV18.
He said, “We are looking to raise ₹40-50 crore to form a subsidiary company. This is for our EV business & efforts are on to dispose of non-core assets whose value was not coming in stock prices.”
Firodia stated in an attempt to de-risk, the company is setting up an EV subsidiary. The company and the board understand the need to transition to EV business. “Every manufacturer needs to de-risk themselves,” Firodia added.
Commenting on the fundraise process, Firodia said, “The bidding process of the non-core asset is on and we will complete the sale by March. KEL will give the funds to the subsidiary company…”
Only after the completion of fundraise, the company plans to reveal the activities, expansion and growth plans of the EV business. “We have set up a management team too,” he revealed.
However, as per Firodia, there are no plans to hunt for external investors in the near term. The present ₹40-50 crore fundraise will be enough for it to survive for a few years. Firodia elaborated, “We will look at investment from other investors a year or two after the business is set up. At present, we are funding it through our own means.”
Further, KEL is optimistic that growth momentum of the company is expected to continue. Compared to the third quarter last year, the company’s net profit has doubled in the third quarter of 2024. Further, “KEL is upbeat on E-Luna, which will further support our growth,” he added. “We are hoping to close at a run rate of ₹150 crore this year.”
The company is anticipating an annual business volume of 1,00,000 E-Lunas. So, KEL anticipates an annual turnover increase of ₹80 crore due to this. “This means we will be looking at a growth of 200-300 percent due to our recent initiatives.”
Commenting on E-Luna, he said, “KEL is supplying various key components to E-Luna. We are currently ramping up our volumes to supply parts to 2,000 sets to 4,000 sets. However, we are ramping up our production to 1,00,000 sets which comes to 8,000 sets a month.”
The company has also witnessed decent rise in their exports and Firodia added strong rupee has helped it here. He is optimistic the exports will grow and margins will improve further in times to come.
(Edited by : Anand Singha)
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