Atul Auto Invests ₹4.91 Crore in its Wholly-Owned Subsidiary

Atul Auto Limited has made a significant investment of ₹4.91 crore in its wholly-owned subsidiary, Khushbu Auto Finance Limited (KAFL), by subscribing to equity shares on a rights basis. This investment was completed on September 28, 2024, with the company acquiring 26,00,000 equity shares of KAFL at a face value of ₹10 each, issued at an issue price of ₹18.90 per share. With this investment, the total amount invested by Atul Auto Limited in KAFL now stands at ₹82.72 crore.

Khushbu Auto Finance Limited (KAFL) is a Non-Banking Finance Company (NBFC), currently categorised as an Investment and Credit Company (ICC). It was previously classified as an Asset Finance Company (AFC). KAFL specialises in financing three-wheelers manufactured by Atul Auto Limited and two-wheelers from various other brands, making it an integral part of Atul Auto’s business ecosystem.

As of March 31, 2024, KAFL reported a paid-up share capital of ₹5,767 lakh, a turnover of ₹4,279 lakh, and a net worth of ₹10,969 lakh. For FY 2023-24, KAFL posted a profit after tax of ₹237 lakh, reflecting its stable financial position within the non-banking finance sector. The company’s continued focus on financing small vehicles has helped it grow its market presence.

Atul Auto Limited’s shareholding percentage in KAFL will remain unchanged at 100% following the current investment, as the company already holds full ownership of KAFL. The recent investment aims to strengthen KAFL’s capital base, enabling it to expand its financing activities and enhance its operational capabilities.

This strategic investment underscores Atul Auto Limited’s commitment to supporting its subsidiary, ensuring KAFL continues to play a vital role in financing three-wheelers and two-wheelers, thereby contributing to the overall growth of the company. 

On September 30, 2024, the share price of Atul Auto Ltd opened at ₹650.00, touching the day’s high at ₹650.00, as of 9:42 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.