Kabirdass Motor Company plans expansion, to raise funds through IPO

Chennai, 2nd July, 2009: Kabirdass Motor Company Ltd. plans expansion, To introduce eco-friendly two-wheelers in India

Incorporated in November 2006, Kabirdass Motor Company Limited (KMCL) is engaged in the manufacture and distribution of electric bikes and scooters under the brand name 'Xite'.

The Company belongs to the Kabirdass group of companies that also comprises Best Cast IT Ltd., S.R.K. Casters and Shareway Securities Ltd. The Company decided to manufacture battery-operated electric vehicles to encash on the vast experience of the promoters in the auto component industry, their time-tested ability in vendor development and the growing demand for non-polluting vehicles.

Product Specifics

An electric bike or scooter is a battery-operated vehicle that is very economical with low maintenance cost and zero pollution. They use rechargeable batteries that can be charged easily using a power connection.

Battery-operated scooters provide clean, affordable and eco-friendly city transportation. The operating costs of the electric bikes and scooters is very low (less than one unit of per charge for every 50 km), which is a major attraction for the Indian market. The vehicle does not require regular maintenance, and is targeted at college students, senior citizens, and housewives. In a span of 21 months, the company has sold over 1,852 bikes and scooters.

The first of a series of electric bikes and scooters manufactured by Kabirdass are an advanced zero-emission, battery-powered (250 Watt to 1500 Watt) scooterettes. With the rising cost of fuel, which is a constant worry to most consumers and the ever-increasing pollution levels through vehicle emissions, these environment-friendly bikes/scooters seem to be the best bet for genNext consumers.

KMCL has found wide acceptance for its products in Tamil Nadu, and is planning to introduce the same in the other Southern states like Karnataka, Andhra Pradesh and Kerala. Kabirdass which has been selling XITe bikes and scooters for over a year now, maps its customer profile under 18 years, or above 40 years.

The Xite Reliant

It is an innovative electric scooter that is powered by maintenance-free battery 20Ah, that ensures a smoke-free and noise-free ride. It is also easy to maintain and comes with one year warranty.

Major events & Achievements

- Winner of the 2007 New Ventures India Business Plan Competition - certificate received from Investor Forum 2007.
- First batch of scooters assembled and delivered to customers in Jan 2007.
- 5 models of electric scooters launched in Feb 2007.
- Approval for K 1500 received from ARAI in Nov 2007.
- Sales crossed 1,000 units mark in first year of operations in March 2007.
- Company introduced silica gel battery in Jan 2008.
- Controller developed successfully by R&D team in Jan 2009.

Strong Marketing & Distribution Network

The Company's umbrella brand "Xite" is well-established in Tamil Nadu, Andhra Pradesh and Karnataka. Continuous investment and efforts by the company to spread the brand has resulted in increasing the market share.

The credit for the establishment of "Xite" brand across the southern region of the country goes to the strong marketing and distribution network. Currently, the Company has nearly 33 dealers and it plans to increase this number in a phased manner in every part of India. The Company has embarked upon Localization Program of key components.

The focus on sales forces effectiveness as a key business driver has given a strong competitive edge to the Company over its competitors. Implementation of business planning tools, focus on technical support, field coaching and constant evaluation of product knowledge and training has helped in improving effectiveness and field force productivity.

R&D

Presently the Company has assembled scooters upto 1500 watts of motor power. After expansion, the company plans to have higher capacity electric scooter having 2,000 watts to 3,000 watts with long range of 150 to 200 km on single charge. Further it proposes to have standardization and unification of spares for all types of electric scooters.

Industry Summary

Indian two-wheeler industry has embraced the new concept of electric bikes and scooters that are a very popular mode of transport in developed countries like America, Japan and China. With the rising cost of fuel, increasing levels of pollution and congestion in urban areas, higher running and maintenance cost of vehicle, the electrically charged bikes and scooters have a very bright future in the area of personal transportation.

Financials

There has been a marginal increase in sales for the financial year 2009 to Rs.260.48 lacs, from Rs. 249.46 lacs in 2008, an increase of 4.42%. During the year, the company entered into an agreement with Hero Ecotech Ltd. for transfer of rights of the KMC product K1500SI along with the license and approvals for the same.

Achievements

Some of the Company's achievements include getting certified for ISO 9000, TS 16949, and getting export orders from large multinationals in the US, UK, Japan, France and Israel. Group companies Best Cast IT Limited and S.R.K. Casters Pvt. Ltd. have won several best supplier awards and Best development awards.

The Company is planning to come out with an IPO shortly.

Source : Equity Bulls

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