UPL To Unlock Value Of Seeds Arm Advanta Through Primary Or Secondary Sale

UPL Ltd. aims to unlock the value of its seed unit, Advanta Enterprises Ltd., by raising funds via the primary or secondary sale of securities through private placement or public offerings.

In fiscal 2023, shareholders of the pesticides and agrochemicals manufacturer approved the creation of distinct pure-play platforms, prompting the company to create a separate platform by transferring its seeds business to Advanta, a subsidiary of the company, according to an exchange filing.

One of the main objectives of creating a separate Advanta platform was to facilitate unlocking value for the shareholders of UPL at an appropriate time, the exchange filing said.

The company will make suitable announcements for such definitive proposals under applicable regulations, subject to receipt of approvals from the respective boards, it said.

UPL reported a net loss in the first quarter of fiscal 2025, which was higher than analysts' estimates.

The agrochemical manufacturer posted a net loss of Rs 527 crore in the quarter-ended June. The seeds business faced headwinds on account of weather challenges that impacted production and created inventory shortages and supply constraints, leading to a revenue drop of 7% and Ebitda decline of 30% year-on-year.

Shares of UPL rose as much as 1.29% during the day to Rs 609.95 apiece on the NSE. It was trading 0.84% higher at Rs 607.2 apiece, compared to a 0.43% decline in the benchmark Nifty 50 as of 1:30 p.m.

The stock has declined 0.03% during the last 12 months and has advanced by 3.5% on a year-to-date basis. The relative strength index was at 69.

Seventeen out of the 29 analysts tracking the company have a 'buy' rating on the stock, six suggest a 'hold' and six have a 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 4.1%.