Kinetic Trust Limited is an Indian financial services firm registered with the **Reserve Bank of India (RBI)** as a **Non-Banking Financial Company (NBFC)**. Classified specifically as a **Loan Company**, it operates as a **non-deposit-taking** entity. The company is currently in a pivotal transition phase, characterized by a comprehensive change in ownership and management control aimed at a strategic business revival. --- ### **Core Business Operations & Regulatory Framework** Kinetic Trust Limited focuses on the deployment of capital through **loans, advances, and investments in securities**. As a regulated entity, it adheres to the following framework: * **RBI Registration:** Holds Certificate of Registration (**CoR**) No. **06.00084**, granted on **April 20, 1998**, under Section **45-IA** of the RBI Act, 1934. * **Asset Quality:** The company maintains high asset quality standards. As of **May 2025**, it reported **zero loans or advances overdue for more than 90 days**. Furthermore, no existing loans were extended or renewed to settle overdues during the most recent fiscal cycle. * **Internal Controls:** The company implemented accounting software with **audit trail (edit log)** features on **December 11, 2023**. It maintains a phased physical verification program for fixed assets over a **3-year cycle**, ensuring all immovable property titles are held in the company’s name. * **Operational Efficiency:** To optimize administrative costs, the company recently transitioned its **Registrar and Transfer Agent (RTA)** from Link Intime India Pvt Ltd to **Skyline Financial Services Private Limited**. --- ### **Strategic Change in Control: The Takeover & Open Offer** The company is undergoing a significant leadership transformation following a **Share Purchase Agreement (SPA)** signed in **March 2024**. This agreement facilitates the complete exit of the original promoters and the entry of a new controlling group. #### **The Acquisition Structure** * **Acquirers:** **Mr. Sandeep Garg**, **Mrs. Mallika Aggarwal**, and **Sequence Builders Private Limited** (acting as a Person Acting in Concert - **PAC**). * **SPA Transaction:** The Acquirers agreed to purchase **23,49,675** equity shares (**69.93%** of voting capital) from the existing promoters at **₹3.50** per share. * **Mandatory Open Offer:** Under SEBI (SAST) Regulations, an open offer was launched to public shareholders for up to **8,73,600** shares (**26.00%** of voting capital) at a premium price of **₹20.00** per share. * **Interest Component:** Due to historical non-compliance by the previous promoters in **FY 2019-20**, the current offer price includes a **10.00% per annum interest factor** to compensate public shareholders for the delay in the exit opportunity. #### **Post-Transaction Shareholding Projection** | Category | Shares Held | % of Voting Capital | | :--- | :--- | :--- | | **Acquirers (Proposed via SPA)** | **23,49,675** | **69.93%** | | **Public Shareholders (Open Offer Size)** | **8,73,600** | **26.00%** | | **Acquirer 2 & PAC (Existing Holding)** | **934** | **0.028%** | | **Total Voting Share Capital** | **33,60,000** | **100.00%** | --- ### **Capital Structure & Financial Position** The company’s ability to expand is currently moderated by the ongoing takeover process, which restricts capital issuance. * **Authorized Share Capital:** Increased in **March 2025** from **₹3,50,00,000** to **₹5,50,00,000** (55,00,000 shares of **₹10** each) to provide future financial flexibility. * **Paid-up Capital:** Currently stands at **₹3,36,00,000** (33,60,000 equity shares). * **Net Owned Fund (NOF) Status:** As of **March 31, 2025**, the company reported an **NOF of ₹4.02 Crores**. This is below the **RBI-mandated minimum of ₹5 Crores** for NBFC-NDs. The company has formally notified **RBI** and **SEBI** that this shortfall cannot be rectified until the takeover process is finalized, as capital cannot be raised during the pendency of the offer. --- ### **Governance & Management Structure** The company operates as a standalone entity with no subsidiaries. Governance is managed by a **5-member Board**: | Category | Number of Directors | Representation (%) | | :--- | :---: | :---: | | Promoters / Executive / Woman Director | **3** | **60%** | | Independent Non-Executive Directors | **2** | **40%** | **Key Personnel Risks:** The company has faced challenges in maintaining key managerial personnel. It was without a **Company Secretary and Compliance Officer** from **March to September 2024**. A subsequent appointment in September resulted in a resignation shortly thereafter in **November 2024**, indicating a period of administrative volatility. --- ### **Risk Factors & Regulatory Contingencies** Investors should note the following critical risks associated with the transition and regulatory environment: * **Regulatory Approvals:** The completion of the management change is strictly contingent upon **RBI approval**. If the RBI rejects the application, the Open Offer may be withdrawn under **Regulation 23** of SEBI (SAST). * **Statutory Delays:** Any delay in receiving approvals may require the Acquirers to pay an additional **10.00% interest** to shareholders for the extended period. * **Escrow Forfeiture:** Under **Regulation 17(9)**, any willful default in pursuing necessary approvals could lead to the forfeiture of funds held in the transaction's escrow account. * **Listing Compliance:** The Acquirers have committed to maintaining the **Minimum Public Shareholding (MPS) of 25%**. If the Open Offer results in a promoter stake exceeding **75%**, they are obligated to divest the excess to comply with **SCRR** rules. * **Asset Protection:** The new management has pledged not to alienate any significant assets of the company for **two years** following the takeover, except in the ordinary course of business.