Motoroyale Kinetic to raise up to Rs 100 cr in two phases

Multi-brand superbike maker Motoroyale Kinetic is in discussions with HNIs and family offices to raise up to Rs 100 crore funds in two phases for product development and growth activities. The first round of capital infusion is expected to be in place by March next year, Motoroyale Kinetic managing director Ajinkya Firodia said on Thursday.

The Kinetic group company is the exclusive distributor of Italian motorcycle brands MV Augusta, SWM and FB Mondial besides British iconic brand Norton as well as Hyosung of Korea. The company set up in 2016 with the launch of MV Augusta formed an international joint venture with Norton in November 2017.

"We already have invested around Rs 25 crore in the company. Now we need one round of funding for developing products from the Norton joint venture. "We also need another Rs 70-80 crore, primarily the working capital, once the products are in the market for attaining volume, setting up dealerships and their marketing," Firodia told reporters at the launch of the 800-cc tourer superbike MV Augusta Tourismo Veloce and a new dealership in Navi Mumbai.

He said that Motoroyale along with Norton is developing two new bikes with one of them fully made-in-India and the other with 50 per cent local content, which are expected to hit the domestic market by March 2020 and in 2021. The company is looking to sell 50,000 bikes per months from the JV, of which 30,000 for the domestic market and rest for exports, he added.

"We are not going to private equity players for raising Rs 25 crore for product development under the JV as this is a small ticket size. "Instead we are going to family offices, and high networth individuals (HNIs). We may also decide to keep it as our own investment because funding through PE will come at a dilution and do the main investment later through PE when the products are ready," he said.

Firodia said that the first round of funding of Rs 25 crore will be completed by March next year, adding, " either we will close the deal or family will invest." Another Rs 70-80 crore will be raised through the market by 2021, he added. Turismo Veloce is priced at Rs 18.99 lakh (ex- showroom) and Motoroyale has also announced a special price of Rs 16.99 lakh for its first three customers of the Turismo Veloce.

"With the launch of Turismo, we at Motoroyale have once again established our objective of bringing the most iconic and exotic bikes with an unparalleled blend of power, speed and performance for the riders in India," he said. He said that the niche superbike segment, which is Rs 4-5 lakh and above segment, stands at around 15,000 bikes per year.

Motoroyale sells around 2,200 bikes per year, of which Hyosung brand accounts for a little over one-third at 800-900 units per year and Mondial volume clocking around 600-700 units. "We are looking to sell around 40 Turismo, whose volume currently stands at 150 per year," he added.

The company also plans to have a dealership network into double-digit by the fiscal-end, he said, adding Motortroyale will set up a dealership each in Dehradun, Delhi and Bhutan by September. At present it has seven dealerships pan India, he said..