TNI || New Delhi || 28th Sep 2021
The Japanese Agriculture and heavy Equipment firm, Kubota Corp, has recently been in talks with the Nanda family, who are the promoters of Escorts Ltd., the fourth largest tractor maker in India.
The discussion concerns the increase in the stake of Kubota Corp, thereby making them the controlling shareholder in the tractor & engineering construction company.
This, according to the sources, is the part of the strategy which focuses on doubling down the potential of India’s tractor market of Osaka-based conglomerate.
Escorts, which is a Faridabad-based group, is exploring the option of a complete sale of the promoter holding, however, this may not happen immediately but in stages.
The Nanda family, which is led by Nikhil Nanda, owns 36.59% of the listed Escorts as of June, out of which 24.99% is owned by Escorts Benefit & Welfare Trust.
As per the strategy, Kubota Corp plans to pick at least around 15% from the promoters. Meanwhile, the shares of Escorts in the trading market have surged 30% over the last three months.
As per the sources, eventually, the Nanda family will sell their stake completely to Kubota Corp. however, the Japanese, for now, are cautious and do not want to rush into things.
It is assumed that the shares will be bought from Escorts Benefit & Welfare Trust.