Kubota to raise stake in Escorts to 54% eventually; Nanda family not selling stake, says CFO

The new agreement will likely allow Kubota to come in as a joint promoter.

“So the issues of preference shares and the open offer is kept at the same price of Rs 2000 per share. So post open offer, which is for 26 percent of the capital. So the Kubota stake will likely go up to 44.8 percent. Now, that is assuming they get the entire 26 percent in the open offer and this preferential allotment is done,” Madan explained.

“Essentially after that deal, what will happen is the Kubota shareholding after the second capital will likely go to 53- 54 percent level and there will also be another family which is the existing promoter will go up to the individual stake toward 14 percent,” he added.

Escorts will remain an exclusive vehicle for both the partners.

"The existing JVs, which we have right now with Kubota, both Escorts Kubota India, as well as the sales JV which is Kubota Agri Machinery India, will eventually get merged into Escorts. So it will be a single entity subject to certain conditions. So that will be the single entity for both the partners in India," Madan further specified.

When asked if the Nanda family would look to sell the 14 percent stake in the near future and if there would be any change in the management structure post this deal coming through, Madan said, “There is no intention of selling any shares by the existing promoters, so they will continue to hold those shares. Even in the agreement there no call options or drag rights against the promoters. So, they will be in the joint control, but this very unique deal and not really a change of control happening. So this is like a friendly deal, which we are doing with Kubota.”

: Backstory: When Nanda brothers parted ways leading to decline of Escorts group