Promoters’ stake in UPL crosses 30%, first in 5 years

Two promoter entities, Harmonic Ventures and Suresight Ventures, bought nearly 6.7 million shares from the open market, trading data on promoters and insiders showed. Promoter holding in UPL has increased from 27.96% in September 2021 to 30.74% as of December 2022.

While the company said it had realigned its strategy to unlock value for shareholders, analysts said the company’s strategy to move up the value chain by increasing the share of sustainable and differentiated products, its backward integration initiatives, and farmer connect yielded good results.

“The company has committed to delivering its FY23 guidance,” said a company spokesperson. “UPL also recently announced strategic corporate realignment initiatives, creating distinct pure-play platforms to accelerate growth and unlock value for shareholders.”

During the September 2022 quarter results, the management addressed the worry about high debt by further reinforcing the $500 million net debt reduction target, taking the net debt to $2 billion by the end of FY23. UPL recently announced a corporate realignment of its business into four platforms, i.e., India Agtech, Global Crop Protection, Global Seeds, and Manufacturing and Specialty Chemicals.

As a part of this initiative, marquee investors, such as Abu Dhabi Investment Authority, Brookfield, KKR, and TPG, have collectively invested around ₹4,000 crore for minority stakes in India Agtech and Global Seeds Business Platforms.

“We believe this simplified structure would gain focused attention, capital allocation based on growth prospects, and (enhance the) value unlocking potential,” said Rohit Nagraj, analyst at . “This remains the biggest trigger for UPL, and hence we remain optimistic about the company.”
Despite volatility, UPL has maintained revenue growth guidance of 12%-15% year-on-year.

According to Manish Mahawar, an analyst at Antique Stock Broking, volume growth is expected to pick up on the back of the continued momentum of strong demand across regions in the second half of FY23. “Additionally, the company will continue to implement price hikes on the back of a significant increase in interest cost across regions.”