Escorts Kubota - Structure Simplified, Merged Entity Well Placed To Grow: ICICI Direct

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ICICI Direct Report

Escorts Kubota Ltd. passed a resolution to amalgamate Escorts Kubota India Pvt. Ltd. (joint venture between Escorts and Kubota in 40:60 ratio, tractor manufacturing entity) and Kubota Agriculture Machinery Pvt. Ltd. (joint venture between Escorts and Kubota in 40:60 ratio, including all farm machinery presence of Kubota in India) into Escorts Kubota for swap ratio of 5:129 and 5:220, respectively.

In FY22, Escorts Kubota and Kubota Agriculture Machinery had revenue of Rs 689 crore and Rs 1820 crore, respectively.

Escorts Kubota incurred a loss of Rs 96 crore while Kubota Agriculture generated profit of Rs 53 crore.

This comes in line with the earlier announcement made at the time of Kubota acquiring a further stake in the company and joining as co-promoter. It is aimed at simplifying the group structure with listed entity now including Kubota’s complete presence in India.

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