Rakesh Jhunjhunwala divests Escorts stake; stock declines nearly 4%

The ace investor held 5.68% in the company at the end of February. Escort's latest shareholding pattern doesn't have his name in the public investors' list

Shares of Escorts dropped close to 4 per cent on Tuesday after it emerged Rakesh Jhunjhunwala has divested his holdings in the tractor manufacturer. At the end of February 2022, the ace investor held 5.68 per cent stake in the company. The latest shareholding pattern disclosed by Escorts doesn’t feature Jhunjhunwala’s name in the public shareholders’ list. This implies either he has fully divested his holdings or it has dipped below 1 per cent.

Shares of Escorts fell 3.74 per cent to end at Rs 1,541.

“On the expected lines, Jhunjhunwala has tendered all or most of his shares in the open offer,” said a note by Edelweiss Alternative Research.

Earlier, Japanese firm Kubota launched an open offer to acquire 26 per cent stake in the company at Rs 2,000 per share. The open offer was triggered by the Rs 1,872-crore preferential allotment to Kubota.

Post the preferential allotment, Kubota’s stake in the company rose from 9.09 per cent to 14.99 per cent. The Japanese firm became a joint promoter of Escorts along with the Nanda family. Given the attractive premium in the open offer, investors had tendered more shares than what Kubota intended to buy. As a result, the acceptance ratio in the open offer came in at 72.2 per cent.