UPL Limited Invests in New Agrochemical Player in China

On August 10, 2024, UPL Limited announced that UPL Hong Kong, a step-down subsidiary, has informed about its investment in Uniphos International China Limited (UICL).

Uniphos International China Limited (UICL) operates in the agricultural chemicals industry and was newly incorporated on August 5, 2024. As a newly established company, UICL still needs to have available turnover data from the past 3 years.

The proposed investment by UPL Hong Kong, a step-down subsidiary of UPL Limited, will involve acquiring up to 49% of the capital of Uniphos International China Limited (UICL), resulting in UICL becoming an associate entity. As a result, UICL will be considered a related party once the investment is completed. There is no direct or indirect interest in UICL from the promoter, promoter group, or group companies, and the transaction will be conducted at arm’s length.

Acquisition Details

• Nature of Consideration: UPL Hong Kong plans to invest up to USD 98,000 in cash, distributed across several tranches.
• Shareholding Details: UPL Hong Kong will acquire 49% of Uniphos International China Limited shares. Jiangsu Jingfu International Trading Company Limited will hold 20%, and Stallions Investment Management will own 31%.
• Objective of Acquisition: UICL will operate in the sale and purchase of crop protection chemicals, aligning with UPL’s strategic interests.

Financial Highlights

UPL’s total revenues decreased by 15% year-on-year (YoY) to ₹14,078 crore in the March quarter of FY24, down from ₹16,569 crore in the same quarter of the previous fiscal year. For the full fiscal year, revenues dropped by 20% to ₹43,098 crore in FY24, compared to ₹53,576 crore in FY23. The company’s net profits plummeted by 95% year-on-year (YoY), falling to ₹40 crore in Q4FY24 from ₹792 crore in Q4FY23. UPL’s earnings before interest and tax (EBITDA) margins dropped by 480 basis points (bps) to 13.7% in the March quarter, down from 18.3% in Q4FY23.

About UPL Ltd

UPL is a major player in agricultural solutions and services, offering over 14,000 registered products in around 140 countries and access to 90% of the global food supply. The company’s product range includes crop protection chemicals such as insecticides, fungicides, herbicides, seeds, and bio-solutions.

On August 12, 2024, UPL share price opened at ₹552.50, touching the day’s low at ₹546.65, as of 10:30 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.