UPL Plans IPO for Advanta Enterprises, Aims for $4 Billion Valuation

According to sources cited by CNBC-TV18 on April 4th, UPL Ltd, a provider of sustainable agriculture products and solutions, is considering launching an initial public offering (IPO) for its seeds business, Advanta Enterprises, in early FY25. The report states that BofA Securities, Morgan Stanley, and JM Financial will act as bankers for the Advanta IPO. UPL aims to divest approximately 10-12 percent of its stake in the subsidiary.
The IPO proceeds from Advanta Enterprises are expected to be used by UPL for deleveraging, with a target valuation of $4 billion. In addition to the IPO plans, UPL had previously announced a rights issue worth over Rs 4,000 crore. In a filing to the exchange on March 26th, UPL mentioned that it is in the process of completing the necessary formalities and compliances for the rights issue.
At present, UPL holds an 86.7 percent stake in Advanta Ent, while private equity firm KKR owns a 13.3 percent stake. KKR had acquired its stake for $300 million in September 2023.
On April 4th, UPL shares were trading 2.61 percent higher at Rs 489.40 apiece on the BSE during late trading hours. However, UPL reported a consolidated loss of Rs 1,217 crore during the December 2023 quarter (Q3FY24). In the same quarter of the previous financial year, the company had a net profit of Rs 1,087 crores. The company’s revenue from operations also declined by 27.72 percent to Rs 9,887 crore in the quarter under review, compared to Rs 13,679 crore in the corresponding period last year.
Source: krishakjagat