Kinetic Engineering was locked at 5% upper circuit at Rs 36.95 at 9:56 IST on BSE, with the stock extending Tuesday's 5% rally triggered by the firm selling its entire stake in Mahindra Two Wheelers to Samena Capital.
Meanwhile, the S&P BSE Sensex was up 60.82 points or 0.29% at 20,913.29.
On BSE, so far 10 shares were traded in the counter as against average daily volume of 2,650 shares in the past one quarter.
The stock opened with an upward gap, surging by the maximum 5% daily circuit and remained locked at the 5% level at Rs 36.95 so far in the day. The stock had hit a 52-week high of Rs 103 on 26 February 2013. The stock had hit a 52-week low of Rs 33.50 on Monday, 24 February 2014.
The stock had underperformed the market over the past one month till 25 February 2014, sliding 11.56% compared with the Sensex's 1.33% fall. The scrip had also underperformed the market in past one quarter, declining 54.87% as against Sensex's 1.2% rise.
The small-cap company has equity capital of Rs 13.57 crore. Face value per share is Rs 10.
Share of Kinetic Engineering (KEL) have rallied 10.13% in two trading sessions from a recent low of Rs 33.55 on 24 February 2014 after the company during trading hours on Tuesday, 25 February 2014 said it has sold its entire shareholding in Mahindra Two Wheelers (MTWL) to Samena Capital, a Private Equity Investment Group focused on Asia and Middle east. The stock had rallied by the maximum permissible level of 5% to settle at Rs 35.20 on Tuesday, 25 February 2014.
KEL said that the stake-sale in MTWL will fetch approximately Rs 182.10 crore to the company, and after certain committed payments towards NCD repayments and cost of financing etc, KEL expects to receive net proceeds of around Rs 109.80 crore. KEL will utilize the net proceeds to meet various obligations of its business including working capital and substantially towards FCCB/debt repayment obligations to strengthen its balance sheet, the company said in a statement.
Kinetic group had originally acquired stake in MTWL over 5 years ago, in November 2008, when its group company, Kinetic Motor Company (KMCL), sold its two wheeler business assets to MTWL, for cash as well as a 20% strategic equity stake. Subsequently, KMCL was merged with KEL in year 2012, and thus, the stake had been transferred to KEL.
KEL has recently entered into two technical alliances, with Magna Steyr and with TGB of Taiwan and intends to build its business with a focus on Transmission Systems through these tie ups.
Kinetic Engineering reported a net loss of Rs 7.82 crore in Q2 September 2013, higher than net loss of Rs 7.75 crore in Q2 September 2012. Net sales declined 36.8% to Rs 13.33 crore in Q2 September 2013 over Q2 September 2012.
Kinetic Engineering manufactures a variety of automobile components.
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