UPL plans to launch IPO of its seeds business, Advanta Ent, in early FY25

Sustainable agriculture products and solutions provider  UPL Ltd is likely to launch an initial public offering (IPO) of its seeds business Advanta Enterprises in early FY25, CNBC-TV18 reported quoting sources on April 4.

BofA Securities, Morgan Stanley, JM Financial are bankers to the Advanta IPO, the sources said, adding that the company plans to divest nearly 10 -12 percent stake the subsidiary.

The report further mentioned that UPL is likely to use proceeds of Advanta Ent issue for deleveraging. It is likely targeting a valuation of $4 billion.

The company had also planned a rights issue worth over Rs 4,000 crore and in an exchange filing on March 26, it mentioned that it is in the process of completing the necessary formalities and compliances for the same.

UPL owns 86.7 percent and private equity firm KKR has 13.3 percent stake in Advanta Ent. KKR had acquired the stake for $300 million in September, 2023.

For financial year 2023, Advanta had reported revenue of ₹3,558 crore and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of ₹921 crore. 

UPL's debt burden has been a key trigger for the stock. As of December 2023, the company had a net debt of $3.77 billion and has targeted reducing its net debt by $2.5 billion by March 2024.