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Dolat Capital Report
Escorts' board has announced Kubota (9% shareholder) will acquire 46.9mn additional shares through preferential allotment plus open offer, and join as co-promoter with Nanda family.
Post transaction Kubota will become joint promoter with existing Promoters of Escort (Nanda family).
Post this Kubota shareholding will increase to 44.8% (post 1st capital reduction of 12.2mn treasury share) while Nanda family stake will be 11.8%. The Nanda family is not selling any stake.
Escorts has a strong presence in the Indian tractor market (Escorts has 11% market share while Kubota has 2-2.5% market share in India) and Kubota has proven global technology capabilities.
Kubota's takeover will substantially improve Escorts' medium-term growth outlook.
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