Escorts not in hurry to list its arms on the exchange

Stocks

oi-Shoaib MD

By Shoaib Md

Published: Tuesday, July 5, 2011, 12:39 [IST]

Escorts, a tractor maker has taken the decision to separately list its big verticals. This decision has been made only "in principle" and there is nothing immediate to implement it, according to Reuters.

This will unlock value and provide capital for the group to seek better opportunities said Nikhil Nanda, Joint MD, reported the agency.

The news was first reported by the Times of India newspaper that the company was considering hiving off the railway component and also the auto component as separate entities. These will be listed on the bourse and it should provide opportunities for retail investors to buy the company of their choice.

The company is looking to increase its railway and construction businesses. In this direction it has made investments for the same.
Last year, the group canceled its plans for an IPO as they wanted a better market mood and pricing scenario to list the business.

The investor angle: For a value investor, this should open a unique opportunity.

The company has been in existence since 1944, and it has been involved in many different businesses. A lot of its land bank would have been completely written-off considering the group long existence.

With the company deciding to separate each of its major arms and list them would result in a lot of value unlock.

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