The board of Kinetic Engineering on Tuesday approved the conversion of the personal loan given to the company by managing director Ajinkya Firodia into equity. The base price for conversion has been set at Rs 92.5 per share.
Firodia had given an unsecured interest-free personal loan to the tune of Rs 6 crore to Kinetic Engineering in 2016 for its working capital and capex requirements. According to Kinetic, the company has since been steadily improving its performance and it is now posting a net profit for the past four quarters.
The company received regulatory approval to convert the loan into equity last year and allotted the first tranche of 293,569 shares on conversion of the loan into equity. The allotment was done at Rs 35 per share in February 2021. Further, the allotment of 293,569 shares for converting the balance of the loan into equity would be made at Rs 92.50 per share.
Firodia said Kinetic had turned around its operations and successfully established itself as a credible auto component player. Kinetic is supplying transmission components and assemblies to the companies such as American Axle, Renault Nissan, Magna Powertrain, Mahindra, Ashok Leyland and Carraro. “The company has recently forayed into products for electric vehicles by launching rigid axles for electric 3Ws and also for gearbox for electric 2W. It is also in discussion with several other customers for axles for larger vehicles,” Firodia said.