Citi, Ge Caps, Hsbc In Race For Kinetic Finance Jv

The proposal by Kinetic Finance, the auto financing arm of the Kinetic group, to form a strategic financing venture is gaining wind as three multinational banking firms -- Citibank, GE Caps and HSBC -- have thrown in their hats to enter the fray. It is expected that more banks will join the race before the submission of bids on February 15.

Sulajja Firodia Motwani, joint managing director of Kinetic Engineering, told Business Standard that Kinetic Finance was working with Ambit Corporate Finance, its advisor to the proposed strategic financing initiative, but declined to confirm the names of the banks it is holding discussions with, and the possibility of forming a joint venture with Kinetic Finance.

The strategic financing partners, among other things, will be submitting an initial indicative price in their bids. The bids will also be required to furnish details regarding the funds that the banks propose to bring to the table. The bids submitted will decide the equity structure of the proposed financing arm in case a separate joint venture is formed, in addition to other modalities.

Depending on the final partner's product portfolio, the strategic venture could leverage Kinetic's vast dealership network of 350 outlets across the country to sell other finance products as well. These could include insurance products, personal loans, even home loans, among other products, depending on the profile of the strategic partner.

However, it is expected that a decision on the initiative will take about a couple of months' time.

Kinetic Finance, a publicly listed company which provides finance solutions to customers of Kinetic's two-wheeler products, is part of the Firodias-promoted Rs 1,200 crore Kinetic group.

Kinetic Motor Company (KMCL), which manufactures ungeared scooters, and Kinetic Engineering (KEL), which produces motorcycles and mopeds, are other group companies. KMCL and KEL, together with around 350 dealerships across the country , have access to one of the biggest auto dealership network in India.