The shares of a micro-cap company in the auto ancillaries sector gained 3 percent on Tuesday’s early deals to reach an intraday high of ₹ 138.00 apiece on the Bombay Stock Exchange (BSE). This happened after the company’s board passed a resolution for the allotment of shares to its promoters as they are infusing funds into the company.
According to an exchange filing, the board of directors of Kinetic Engineering Ltd has passed a resolution for the allotment of equity shares and OCCPS (Optionally Convertible Cumulative Preference Shares) to the company’s promoters.
The board has allotted 22,85,000 equity shares at ₹ 120.00 per share amounting to ₹ 27.42 crore to the promoters of the company. Moreover, it has allotted 80,000 OCCPS at ₹ 120.00 per share amounting to ₹ 0.96 crore to Jayashree Firodia Trust, promoter of the company.
Kinetic Engineering is engaged in the business of supplying automotive components for the Medium and Heavy Commercial Vehicles (MHCV), automotive and tractor industries. The company caters to both domestic and international markets.
With a market capitalization of ₹ 266 crores, Kinetic Engineering is a micro-cap company. It has a low return on equity of 9.89 percent and a debt-to-equity ratio of 1.84. Its shares were trading at a price-to-earnings ratio (P/E) of 96.33, which is higher than the industry P/E of 39.87, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 54.68 percent stake in it, followed by retail investors with a 45.31 percent stake and other domestic institutions with 0.01 percent.
Written by Simran Bafna
