Advanta Enterprises, a subsidiary of Indian agrochemical company UPL, has started preparations to enter the stock market.
Advanta Enterprises, a subsidiary of Indian agrochemical company UPL, has started preparations to enter the stock market. The company has submitted the draft papers for its IPO to SEBI. Besides, these papers have also been sent to BSE and NSE.
What is the IPO plan?
The company has made it clear in the exchange filing that this IPO will be completely an offer for sale (OFS). This means that no new money will come into the company, rather the existing shareholders will sell their shares. A total of 3.61 crore (36,105,578) shares will be sold. Of these, UPL will sell about 2.81 crore (28,107,578) shares of its share. The remaining shares will be sold by other eligible shareholders. In this way, the aim of the company is that the existing investors and promoters can extract value by releasing some part of their shares in the market.
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Why is UPL taking this step?
UPL has been trying to extract value from its portfolio companies for a long time. Many big companies have listed their subsidiaries in the Indian stock market in recent years. This gave them good value from investors and Advanta’s IPO is also a step in this direction.
The company has said that this IPO will come only when all the necessary approvals are received. UPL has said in its statement that this offer will depend on market conditions and other considerations. That means, if the market environment is not good then the IPO may get postponed.
Promoter status
It has been made clear in the filing that UPL will remain the promoter of Advanta Enterprises. Even after the IPO, UPL will retain control over the company. Only as many shares will be sold as are included in the offer.
What does it mean for investors?
With this IPO, common investors will get an opportunity to invest in the seed business. Advanta Enterprises deals in seed production and sales. Agriculture and seed industry in India is continuously growing, hence investors can see long term opportunity in it.
about the company
Advanta focuses on innovation, value addition through natural solutions, and disease, pest and herbicide resistance as well as drought and salinity tolerance, as well as bringing germplasm to local needs. By creating seeds that make crops climate smart, salinity tolerant and drought tolerant, we are protecting agricultural yields and farmer happiness from the vagaries of weather, especially in tropical and subtropical regions.
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