“The fourth generation at the Nanda family is absolutely committed to Escorts,” Nikhil Nanda, chairman and managing director of Escorts, has said soon after announcing onboarding of Japanese tractor maker Kubota as joint promoter of the company along with the Nanda family. The higher participation of Kubota is an attempt by to institutionalise the company, Nanda told Ketan Thakkar and Satish John in an interview. Edited Excerpts:
What gives you the comfort to hold a minority stake in the JV?
I must put my institution before me. This deal is the best deal that Escorts could ever think of and dream of, with the kind of ability and strength that Kubota already has as a global brand. It’s a historic moment not only for the company but also for the country – I mean getting a Japanese major to come in to set up something that would be a hub out of India. When you look at my stake percentage, my percentage stays where it is. There has been a lot of speculation in the past about the fact that the promoter family is on a sell-out mode. I want to categorically say that the family has no intention whatsoever (to sell). Money is not that what drives us, it’s purpose. And for me, the fourth generation is totally committed towards a larger purpose. I look forward to building this partnership between Kubota and Escorts… Numbers are one part of an observation, but there’s a larger construct…and also to institutionalise Escorts, which is something that’s getting done.
Why not retain majority control, or even 50:50 share?
As I said number is one reflection. I think the most important was how do we succeed? How do we create a company that can be institutionalised for the long run? Many family businesses in the last two decades have had a very large fall and a large gain and we can’t afford that kind of velocity. One of the important tasks that I came in with when I lost my father, when I became the chairman in 2018…was, how do you create Escorts which can depend beyond an individual? This is a time that India needs to take certain lessons of institutionalising and not looking at the aspect that I need the golden share.