Farm machinery and construction equipment major Escorts Ltd's board will meet on November 18 to decide on fundraising. The big question on the shareholders' minds is whether Escorts Japanese JV partner Kubota will raise a stake in the company. Currently, they hold about 9 percent and the Nanda family holds a little over 36 percent as of September 2021.
Kubota has been very bullish on the India business. In fact, in August, they had a conference call where they spoke about the next growth trigger for tractors coming in from the India business.
The next important question is what will happen to the Nanda family's stake. Will they exit entirely? Also, is there an open offer on the way, and also what happens to the 24 percent stake that is held by the trust?
It is noteworthy that the stock has already rallied 40 percent in the last six months in anticipation of this stake buy.
The company recently announced that it would increase tractor prices with effect from November 21 in order to offset the rise in commodity prices.
"There has been a steady rise in commodity prices necessitating a price hike to offset the impact of the continuing inflation. The increase in prices would vary across models and variants," the company said in a release.
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It, however, did not share the quantum of the price increase. In a separate filing, the company said its board will meet on November 18 to consider proposals to raise funds by issue of bonds, debentures, nonconvertible debt instruments among others.