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Awaiting price reaction for this filing.
Kinetic Engineering Limited has filed the Monitoring Agency Report from CARE Ratings Limited for the quarter ended March 31, 2025, covering the use of funds from its preferential issue of convertible warrants. The issue was originally sized at Rs.177.10 crore but was undersubscribed, with only 97,56,725 warrants subscribed (against 1,03,56,725 offered), reducing the final issue size to Rs.166.84 crore. Of this, only Rs.56.71 crore has been received by the company so far, with Rs.24.46 crore already utilized and Rs.32.26 crore parked in fixed deposits and monitoring accounts. The full Rs.19.64 crore meant for redeeming preference shares has been used up, along with Rs.4.82 crore for paying overdue liabilities—both largely to related party Micro Age Instruments, which holds 25% in KEL. Notably, no funds have yet been deployed toward the larger proposed objectives of subsidiary investment (Rs.120 crore), capex including a solar project (Rs.12 crore), working capital (Rs.10.10 crore), or general corporate purposes (Rs.10 crore). The revised allocation of proceeds is yet to be finalized by the board, and CARE Ratings flagged the undersubscription as a potential concern for the viability of the stated objects.
Investors should note that the company has raised only about a third of the targeted Rs.166.84 crore, and most deployed funds have gone to a related party. The larger growth-oriented uses—subsidiary investment, capex, and solar project—have seen zero utilization so far, which may delay planned expansion. The undersubscription and heavy related-party usage could raise governance concerns for shareholders.