UPL sells 12.5% in Advanta for $350M, launches ₹3,378 cr rights issue

Mumbai-based pesticides and agrochemicals company UPL will raise around ₹6,300 crore by selling a stake in the company and via a rights issue. Global investment company Alpha Wave Global will invest $350 million (₹2,900 crore) to acquire a 12.5% stake in farming solutions and technology company Advanta Enterprises Ltd, a subsidiary of UPL. The transaction is a combination of a primary investment of US$100 million and a secondary sale of shares of $250 million in Advanta by UPL.

Alpha Wave will invest via its Alpha Wave Ventures II fund, which invests in businesses with a competitive advantage. The primary proceeds will be used to advance Advanta’s growth through organic and inorganic initiatives, capitalising on its positioning and robust tailwinds in the seeds industry, says UPL. It adds that the secondary proceeds will be utilised by UPL to deleverage its balance sheet.

The transaction marks the 2nd investment by a global investor in Advanta, following a US$300 million investment by global investment firm KKR in October 2022.

UPL Ltd (UPL) is an agriculture solutions provider, with annual revenue exceeding US$5 billion. With a presence in 130 countries, its portfolio consists of biologicals and traditional crop protection solutions with over 14,000 registrations.

Alpha Wave operates in three main verticals: private equity, private credit, and public markets, and has offices across nine key locations globally, including New York and London. Jai Shroff, group CEO of UPL, says the deal marks the second investment by a prominent global investor in Advanta since December 2022, validating the fundamentals and growth trajectory for the business. "We look forward to collaborating closely with both Alpha Wave and KKR to leverage their collective expertise."

JM Financial Ltd acted as a financial advisor to UPL and Advanta for this transaction.

Rights issue

The board of directors of the company has also approved the raising of funds through rights issue. The issue comprises 9,38,25,955 equity shares each on a partly paid-up basis for ₹3,377.74 crore at ₹360 per rights equity share when fully paid up (including a premium of ₹358 per apiece). With this, the total fundraising by UPL stands at ₹6,300 crore, which will help it boost its expansion plans. The UPL shares are currently (4.14 pm) trading at ₹546.85 on the BSE today, up 10.35 or 1.93% from yesterday's closing price. Its m-cap stands at ₹41,781.83 crore.