Escorts plans to list three verticals

CHENNAI: Delhi-based Escorts group is planning to list its three big business verticals as separate entities. In the process , Escorts will hive off the railway component and auto component businesses, said a top company official. The idea is to unlock the value of its subsidiary businesses and offer investors interested in the group opportunities beyond the tractor business.

Speaking to TOI, Nikhil Nanda, joint MD, Escorts, said: “The idea is to de-clutter the businesses and list them to offer the investor enough choice. Over a period of time, investors looking at the group will have a choice of investing in either Escorts (the parent company which focuses on tractors and farm equipments), Escorts Construction Equipment (currently a 100% subsidiary) or the railway equipment and the auto component businesses (both divisions right now).”

The group recently restructured its verticals, demerging the railway equipment and auto component divisions into separate businesses complete with two separate CEOs. “As and when they become large enough , we will turn them into subsidiaries and capitalize them through listing,” said Nanda.

The company has been forging technical alliances with global corporations and is looking to expand its range and overall business spread in all three verticals. For instance, in auto components, where it currently makes two-wheeler shock absorbers , the company is now diversifying into shock absorbers for cars and tractor trailers. “We are in discussions with large original equipment makers for buyback and we are expanding and investing in the division to cover a wider slice of the auto component industry beyond shock absorbers,” Nanda said.