Home / Companies / News /  Kirloskar Oil Engines to invest 250 cr more in NBFC biz

Kirloskar Oil Engines will be investing another 250 crore into its non-bank finance company (NBFC) Arka Fincap as it seeks to grow its operations, its promoters said on Friday.

They also announced plans to monetise its 50-acre land bank in its base of Pune for its realty company Avante Spaces, starting with a mixed use project with a development potential of 20 lakh square feet on a 12-acre plot in the Kothrud area.

"We had committed 1,000 crore for the NBFC business as seed capital, of which we have invested 750 crore already. We want to conservatively grow the book and will be investing the remaining 250 crore into the company by March 2023," Atul Kirloskar, the executive chairman for Kirloskar Oil Engines, Arka's parent company, said.

He said the NBFC lends to small businesses, real estate and other wholesale opportunities, stressing that only 1 per cent of the 1,400 crore book is devoted to borrowers aligned as vendors or customers of any of the companies.

Atul and his brother Rahul Kirloskar are "very patient with the capital" and are not in the game of expanding the valuations for the NBFC. The non-bank lender has borrowings of 700 crore and has the scope to increase on the same.

For the realty development, it will be first looking at land parcels which are held by the Kirloskars itself before branching out to do projects in other parts of the country, Atul said, stressing that the approach in this business as well.

Atul and Rahul on Friday announced a new identity for five of the companies promoted by the family, including Kirloskar Oil Engines, Kirloskar Chillers, Kirloskar Pneumatic Company, Kirloskar Ferrous Industries, and Kirloskar Industries.

The initiative christened as 'limitless' is aimed at turning the predominantly engineering-focused businesses which trace back 130 years, into a solution provider to better reflect the changing landscape.

Officials said there are other areas apart from lending and real estate in which the promoters are interested in to invest in but did not share either the areas or the overall quantum of investments which shall be going out.

Atul Kirloskar indicated that there is headroom for the promoter family to raise debt from the bank, stating that as of end of FY21, it had a net worth of 5,000 crore and a net profit of 1,000 crore across the companies, with a zero debt.

Atul and Rahul, who have a legal dispute running with their sibling Sanjay Kirloskar (who runs Kirloskar Brothers), said the feud has nothing to do with the new initiative or the investments which are being planned. All the investments are being done by companies independently after assessing the current scenario and the case will have no bearing on the initiatives, they said.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout