UPL shares plunge 14% after reorganisation plan

Shares of UPL Ltd plunged 14 per cent on the NSE in early trade on Monday after the company unveiled a sweeping strategic reorganisation of its crop protection business.

KEY HIGHLIGHTS

The stock fell to a low of ₹646.60 on the NSE, and was trading 13 per cent lower at ₹652.75 at 10.34 am, compared with its previous close of ₹752.35.

The sharp decline came even as the company announced plans to create an independent listed entity for its crop protection operations. Under the proposal, the international and India crop protection businesses will be carved out into a new platform, UPL Global Sustainable Agrisolutions Limited (UPL Global), aimed at creating a focused and scalable growth vehicle.

The restructuring involves a merger of UPL SAS, which houses the India crop protection business, into UPL Ltd at a swap ratio of 1,000 shares of UPL Ltd for every 48 shares of UPL SAS. This will be followed by a vertical demerger of the India crop protection business into UPL Global on a one-to-one share swap basis. The international crop protection arm, currently under UPL Corporation in Cayman, will also be merged into UPL Global, with shareholders receiving 1,000 shares of UPL Global for every 213 shares of UPL Corp. The overall process, subject to regulatory approvals from SEBI, CCI, RBI and the NCLT, is expected to take 12–15 months.

Post-reorganisation, UPL Global will have its own management team led by CEO Mike Frank, focusing exclusively on crop protection. The company said the consolidation is expected to drive synergies across research, manufacturing and global market access spanning more than 140 countries. Promoters have committed to an 18-month lock-in for their shares in UPL Global from the date of listing.

Brokerages offered a mixed view on the development. Motilal Oswal Financial Services termed the restructuring strategically positive, saying it simplifies the group structure and separates distinct earnings engines into independently benchmarkable businesses. It believes the pure-play global crop protection entity can now be valued against international agrochemical peers, potentially unlocking value, while the residual entity can sharpen its focus on active ingredients, contract manufacturing and new growth verticals.

Motilal Oswal added that the move strengthens the group’s deleveraging roadmap by enabling capital raises at subsidiary levels, including the planned IPO of Advanta and potential monetisation of Superform, while preserving consolidated cash flows. However, citing uncertainty around the holding company discount as UPL Ltd transitions into a holding company, the brokerage reiterated a neutral rating with a target price of ₹730. It expects revenue, EBITDA and PAT CAGR of 8 per cent, 12 per cent and 37 per cent, respectively, over FY25–28.

Nuvama Institutional Equities was more cautious, flagging that the unresolved debt overhang remains a concern. While it acknowledged that the restructuring is cash and tax neutral, protects minority interests and does not materially alter the capital structure, it noted that leverage pressures persist. Given the recent run-up in the stock and potential dilution post-restructuring, Nuvama downgraded the stock to ‘hold’ with a revised target price of ₹816..

SBI Securities said the move is positive from a medium- to long-term perspective as it creates focused business entities and could accelerate overall group deleveraging, especially alongside the proposed IPO of the seeds business, Advanta.

Earlier, Fitch Ratings said the ratings of UPL Corporation remain unaffected by the proposed reorganisation. Fitch noted that UPL Ltd is expected to retain a majority stake of around two-thirds in the carved-out crop protection businesses post-restructuring, ensuring continued control. It expects cash fungibility across the group to remain intact, with UPL continuing to manage treasury, strategy and capital allocation.

Fitch Ratings believed the reorganisation could attract business-focused investors and improve operational integration, while leaving the group’s credit profile unchanged.

Published on February 23, 2026