As existing investor Kubota eyes majority shareholding in Escorts, analysts expect this going forward
Escorts will issue 9.36 equity shares at a price of Rs 2,000 per equity share to Japanese partner Kubota on a preferential basis.
![As existing investor Kubota eyes majority shareholding in Escorts, analysts expect this going forward As existing investor Kubota eyes majority shareholding in Escorts, analysts expect this going forward](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_850x478/public/2021/11/18/166445-escorts1.jpg?itok=5VXp4XaZ&c=2cd821cd84c64bb56243b052cfc91909)
An existing investor of Escorts, Kubota has made an open offer to pick up an additional 5.9 per cent stake in the company, the tractor manufacturing firm said in an exchange filing on Thursday. The shares of Escorts spurted over 10 per cent to Rs 1802.9 per share on the BSE today.
Kubota, an agricultural machinery Japanese company aims to be the majority stakeholder in the company as “it plans to make an open offer to the public shareholders of Escorts to acquire up to 26 per cent of the share capital”, Edelweiss Alternative Research report states.
See Zee Business Live TV Streaming Below:
Escorts will issue 9.36 equity shares at a price of Rs 2,000 per equity share to Japanese partner Kubota on a preferential basis. The Japanese investor will become a joint promoter of the company along with the existing promoters post completion of the open offer and issue becoming effective.
“The Board has approved the raising of equity capital aggregating to Rs 18,72,74,52,000 through preferential issue of 93,63,726 equity shares of face value INR 10 at INR 2,000 per share (including a premium of Rs 1,990 for each equity share), to Kubota Corporation, Japan, a company incorporated under the laws of Japan," said Escort said in a press release.
Kubota at present holds a 9.09 per cent stake, as per the shareholding pattern of Escorts available on the exchanges; and post preferential allotment, its stake in the company will be 14.99 per cent.
The current promoter group (Nanda family), which holds 37.36 per cent of the company, is not selling any shares of the company, Escorts said in an exchange filing on Thursday.
As per the shareholding, the minimum acceptance ratio is 51 per cent and the final acceptance could be around 70-75 per cent. Thus with favourable risk to reward, one can look to participate at the current market price, Edelweiss report said.
An ace investor Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock market, holds a 4.8 per cent stake in the company, as per the September shareholding pattern. As per Trendlyne, the celebrity investor has 6,400,000 shares worth Rs 1,033.1 crore as of November 18, 2021.
Brijesh Bhatia Senior Research Analyst at Equitymaster says, “Tractor company stocks like Escorts, VST Tillers, and HMT India are bullish since June 2021 and outperforming against the auto index.”
He adds, “The ratio chart of Tractors Index / Nifty Auto Index is approaching the resistance zone of 7 years’ regression channel indicating an end to the outperformance of the tractors index.”
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
![https://www.zeebiz.com/personal-finance/photo-gallery-sip-swp-monthly-pension-income-retirement-corpus-planning-calculator-inr-rs-20000-monthly-investment-for-15-years-inr-99000-monthly-return-for-42-years-313283](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316973-rupee-pixabay-take-1.jpg?itok=02-hJh59)
SIP+SWP: Rs 20,000 monthly SIP for 16 years to get Rs 99,000 monthly income for 42 years; how is it possible?
![https://www.zeebiz.com/market-news/news-bajaj-finserv-rvnl-borosil-renewables-carysil-railtel-corporation-stocks-to-buy-hdfc-securities-recommendation-picks-target-stop-loss-bse-nse-313386](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/317091-26.jpg?itok=gE1cWt7z)
RVNL, Bajaj Finserv and 5 more: Brokerage recommends buying these 7 stocks for up to 3 months | Check target, stop loss
![https://www.zeebiz.com/personal-finance/photo-gallery-nps-vs-ups-vs-ops-monthly-pension-income-retirement-corpus-calculator-what-will-be-your-pension-on-inr-rs-10000-contribution-for-35-years-expert-calculations-313361](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/317060-rupee-pixabay-take-2.jpg?itok=cOVdof_v)
NPS vs UPS vs OPS: What will be your monthly pension if you contribute Rs 10,000 monthly for 35 years? Get expert calculations
![https://www.zeebiz.com/personal-finance/photo-gallery-top-7-etf-sip-mutual-funds-in-5-years-calculator-how-inr-rs-21000-monthly-investment-has-grown-in-nifty-sp-bse-next-50-cpse-uti-icici-pru-nippon-india-motilal-oswal-bharat-22-nift-mid-infra-313306](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316994-indian-currency-pixabay-take-1.jpg?itok=JURVEkst)
Top 7 ETF Mutual Funds With Highest SIP Returns in 5 Years: How Rs 21,000 monthly SIP has grown in each ETF over the years
![https://www.zeebiz.com/personal-finance/photo-gallery-sbi-senior-citizen-fd-fixed-deposit-latest-interest-rate-2024-calculator-what-be-maturity-amount-with-return-on-investments-of-inr-900000-lakh-in-1-3-5-year-guaranteed-return-scheme-retirement-planning-313221](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316909-note-coin-pixabay-take-1.jpg?itok=3RPKcBYE)
SBI Senior Citizen FD Rates 2024: What you can get if you invest Rs 3 lakh, Rs 5 lakh, Rs 7 lakh, and Rs 9 lakh in 1-, 3-, and 5-year FDs
07:43 PM IST