Japan's Heavy Equipment Leader Kubota May Raise Stake in Escorts

Japanese agriculture and heavy equipment firm Kubota Corp is in talks with the Nanda family - promoters of India's Escorts Ltd - to increase its stake and eventually become a controlling sha

BY Realty Plus
Published - Saturday, 25 Sep, 2021

Japan's Heavy Equipment Leader Kubota May Raise Stake in Escorts

Japanese agriculture and heavy equipment firm Kubota Corp is in talks with the Nanda family - promoters of India's Escorts Ltd - to increase its stake and eventually become a controlling shareholder in the tractor maker and engineering Construction Company. This is part of the Osaka-based conglomerate's strategy to double down on the growth potential of the tractor market in India. The Faridabad-based Escorts Group is exploring a complete sale of the promoter holding, although this could happen in stages. The Nanda family led by Chairman Nikhil Nanda held 36.59% of the listed Escorts at the end of June. Of this, 24.99% is owned via the Escorts Benefit & Welfare Trust. As per plan, Kubota Corp intends to initially pick up around 15% from the promoters. Shares in Escorts have surged 30% in the last three months, outperforming the benchmark Sensex, which gained 12.05% in the same period. The stock closed at Rs 1,519.45, up 3.1%, on the BSE Wednesday, for a market value of Rs 20,487.44 crore. Based on this, the promoter holding will be valued at Rs 7,496.3 crore. Eventually, the Nanda family will sell the firm out completely to Kubota. Most probably, these shares would be brought from the Escorts Benefit & Welfare Trust.