M&M, India’s largest utility vehicle maker, has signed a term sheet with Kinetic Motors, the Pune-based two-wheeler manufacturer, in its bid to acquire a majority stake in the company. A term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment is to be made in a company.
M&M is looking to acquire 76% stake in the company valued at about Rs 120 crore. It is doing due diligence of Kinetic’s books and assets. A deal could fructify in the next two months if the due diligence proceeds smoothly, sources said. ET first reported on May 15 that M&M has been in talks with Kinetic Motors to acquire a majority stake.
At present, though, there are no PE players in the race to invest in Kinetic Motors. M&M is one of India’s leading manufacturers of general-purpose utility vehicles, light commercial vehicles, tractors and SUVs. Kinetic Motors has presence in both motorcycles and scooters.
Kinetic Motors declined to comment on the development. “This is completely speculative and I would not like to comment on it,” said Kinetic Motors MD Sulajja Firodia Motwani. M&M too declined comment. “I wish to reiterate that as a company policy, we do not comment on speculative stories,” said an M&M spokesperson.
M&M is quite keen on entering the gearless scooter segment in India which is showing robust growth. Kinetic Motors has a significant presence in the gearless two-wheeler segment and owns brands like Zoom, Nova, Zingo80 and its latest offering, Kinetic Flyte.
The segment though is attracting investment from various competitors. A few months back, Bajaj announced the launch of its new gearless scooter, Bajaj Blade.
Source: Economic Times