Escorts' shares zoom 17% as it divests auto parts business

The company's market valuation rose Rs 555 crore to Rs 3,740 crore

Shares of farm equipment maker Escorts on Thursday zoomed about 17 per cent, after the company announced divestment of its OEM and export business of auto product division to Pune's Badve Engineering.

The scrip surged 17.4 per cent to close at Rs 305.10 on the BSE. During the day, it soared about 20 per cent to hit a 52- week high of Rs 311.8.

At the National Stock Exchange, shares of the company jumped 17.3 per cent to close at Rs 305.

Led by the sharp rally in the stock, the company's market valuation rose by Rs 554.82 crore to Rs 3,739.82 crore.

The company however did not disclose the deal size.

The all-cash deal is part of the company's planned strategic re-orientation of the business to focus on core verticals in agri-machinery, construction equipment and railway equipment, Escorts said in a statement.

"We believe that the transfer of OEM and export business to Badve Engineering will help us focus on our core areas. We are delighted that Badve Engineering has stepped in to take the business forward," Escorts Auto Products & Escorts Railways Products Chief Executive Officer Dipankar Ghosh said.