Kinetic Finance, the auto finance arm of the Kinetic group, is likely to enter into a finance joint venture with a multinational bank using the bidding route.
The finance firm is considering inviting bids from MNC banks which have evinced interest in the venture and will seal the deal with the best bidder. The company is appointing a merchant banker to finalise the ground rules for selecting the partner.
Thus far, three foreign banks have evinced interest in the proposal. According to merchant banking sources close to the development, "Citibank is one of the main contenders in the race. The financial modalities are being worked out."
The bank, which places the winning bid, will gain access to Kinetic's vast dealership network of 350 outlets across the country, where it could also sell its other products such as personal loans, car loans, credit cards among others.
In this case, the bids presented by multinational banks would be evaluated in terms of quantum of funds promised to be brought in by the bank, in addition to the range of products that the bank promises to make available at Kinetic dealerships.
Further, Kinetic customers will be given the option of availing auto finance from either the joint venture that is proposed to be formed, Kinetic Finance or even Countrywide Finance, which offers finance at almost 100 prime Kinetic dealerships across the country.
Senior Kinetic Finance executives declined to comment on the issue. Kinetic Finance was created in December 2000 through a merger of three Kinetic group finance arms -- Kinetic Fincap, Kinetic Lease Finance and Kinetic Capital Finance.
The company is part of the Rs 1,200 crore Kinetic group, which manufactures two-wheelers through two separate subsidiaries -- Kinetic Engineering, which offers motorcycles and mopeds, and Kinetic Motor Company, which manufactures scooters.
