UPL restructuring: Analysts decode impact on valuations, Advanta IPO

The UPL group will operate through two separately listed verticals-Global Crop Protection and Seeds-each with distinct structural drivers.

UPL’s board approved the company's restructuring plans on Friday (February 20, 2026), after market hours. UPL is undertaking a three-step restructuring to create UPL Global (UPL 2) as a unified India and international crop protection platform, positioning it as the world’s second-largest listed pure-play crop protection company.

 

The plan involves merging UPL SAS into UPL Ltd, demerging the India Crop Protection business into UPL 2, and merging UPL Cayman into UPL 2, alongside Advanta’s initial public offering (IPO), consolidating its seeds and Decco businesses. UPL Ltd will remain the parent and capital allocator, with plans to enhance transparency and potentially eliminate the prevailing conglomerate discount to UPL.

 

 

The group will operate through two separately listed verticals—Global Crop Protection and Seeds—each with distinct structural drivers. 

What will UPL’s restructuring mean to the investors?

Analysts believe the revamping of the company will simplify the group into independently benchmarkable pure plays, improving transparency and strategic focus. 

 

Motilal Oswal Financial Services, in its note, said that UPL 2 will become a focused global crop protection platform, while UPL 1 will sharpen its manufacturing-led business-to-business (B2B) positioning. The move also supports subsidiary-level capital raises, accelerates deleveraging, and strengthens the pathway to valuation re-rating, the brokerage noted. 

 

Further, crop protection remains volume-led and resilient, benefiting from diversified demand, biofuel-driven acreage expansion, and expanding post-patent opportunities, with a balanced mix of post-patent and differentiated products supporting margins. Advanta, the high- retuen on capital employed (RoCE) (25 per cent) seeds platform, offers superior margins, strong cash flows, and IP-led growth, enabling both businesses to be valued independently in line with their return and capital intensity profiles.

 

The brokerage has reiterated its ‘Neutral’ rating on the stock with a target of ₹730.

 

Similarly, Antique Stock Broking said that the transaction is a win-win for all i.e., UPL, minority, and private equity holders. Re-structuring will help to simplify the structure, enhance strategic focus, and unlock shareholder value by enabling clearer investment choices. Further, the move will provide an opportunity to give exit to existing private equity (PE) investors (resultant holding of 16.9 per cent with no lock-in period). 

 

UPL's focus remains on de-gearing, with a net debt-to-Earnings before interest, tax, depreciation, and amortisation (Ebitda) ratio of 1.2x-1.5x in the medium term, compared to 4.6x/2.1x/1.6-1.8x in FY24/25/26. 

 

Antique anticipates that holding company discount (higher vs currently 25-30 per cent) in valuation may limit value unlocking going forward. Recently, Advanta has filed a DRHP to get listed, which will be a key near-term trigger for the stock. 

 

The brokerage expects profitable growth, sustained cash flow, and balance sheet deleveraging to be the re-rating catalyst for the stock in the medium term. 

 

Antique maintained ‘Buy’ rating with a target of ₹880, valuing the stock at 16x FY28 earnigs per share (EPS), compared to global peers at 5x-17x (target EV/Ebitda of 6.5x FY28 vs. global peers at 6x-11x).

 

However, At 10:19 AM, UPL shares slipped 13.4 per cent in trade, logging an intra-day low of ₹650.4 per share on BSE. In comparison, BSE Sensex was up 0.6 per cent at 83,315.35.  Disclaimer: View and outlook shared on the stock belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.