UPL sells 8.93% Advanta stake for Rs 2,100 cr, unveils Rs 3,378 cr issue

UPL Ltd has disclosed a strategic investment of $350 million in its hybrid seeds subsidiary, Advanta Enterprises Ltd, by private equity firm Alpha Wave Global. This includes a $250 million (Rs 2,100 crore) secondary stake sale and a $100 million primary equity infusion, according to the company's stock exchange filing on November 19.  

 

Combined with a separate rights issue to raise Rs 3,378 crore, UPL aims to secure nearly Rs 5,500 crore to fund its expansion and reduce debt. The rights issue was announced in a filing on November 20.  

 

Alpha Wave will acquire a 12.44 per cent stake in Advanta, comprising 8.93 per cent purchased from UPL and 3.51 per cent from newly issued equity shares. The deal values Advanta at $2.7 billion pre-money and approximately $2.85 billion post-money.  

 

This follows a $300 million investment in Advanta by KKR in October 2022. After the transaction, UPL will retain majority ownership with a 74.7 per cent stake, while KKR and Alpha Wave will hold 12.86 per cent and 12.44 per cent, respectively.  

 

The agreements were signed on November 19, 2024, with the deal expected to close by March 31, 2025, pending regulatory approvals, including from the Competition Commission of India.

 

UPL’s allocation of funds

 

UPL plans to allocate $250 million from the secondary stake sale toward debt reduction, aligning with its financial goals. Advanta will use the $100 million primary equity infusion to drive growth through organic expansion and strategic acquisitions, capitalising on rising demand for agricultural products.  

 

Additionally, UPL has approved a rights issue of partly paid-up equity shares at Rs 360 each, with eligible shareholders entitled to one share for every eight held as of November 26, 2024. The rights issue will run from December 5 to December 17, 2024.   JM Financial Limited served as the sole and exclusive financial advisor to UPL and Advanta for this transaction, the exchange filing mentioned.

 

Operating in over 80 countries, Advanta offers a diverse portfolio of high-yield, climate-resilient solutions for crops like corn, sunflower, canola, sorghum, and various vegetables. It holds a strong position in markets for tropical yellow corn in India, Thailand, and Latin America, and for sunflower and sorghum in Argentina.  

 

Financial contributions and market performance  

 

In FY24, Advanta generated Rs 4,148 crore in revenue, accounting for 9.62 per cent of UPL’s consolidated revenue, and had a net worth of Rs 3,938 crore, representing 15.87 per cent of UPL’s consolidated net worth.  

 

This strategic move highlights UPL’s focus on unlocking value from subsidiaries while retaining control over high-growth assets.  

 

Ahead of the announcement, UPL shares rose 1.84 per cent on November 19 and have gained about 6 per cent over the past five days, pushing the company's market capitalisation beyond Rs 41,000 crore. However, the stock has delivered flat returns over the last five years.