UPL Plans $500 Million Rights Issue, DRHP Filing Imminent

On Monday, agrochemicals giant UPL Ltd announced its intention to file a Draft Red Herring Prospectus (DRHP) shortly for a rights issue aimed at raising to $500 million (approximately Rs 4,200 crore). 

The company has obtained approval from its board for this initiative, with plans to launch the issue in the early stages of the third quarter of the current fiscal year, according to UPL Ltd CFO Anand Vora, speaking at the company’s post-Q4 earnings briefing.

Vora stated, “We expect to hit the market with the Rights Issue sometime by the end of Q2 or beginning, Q3,” adding that the exact size of the rights issue will be determined based on factors such as pricing and market conditions.

The company has been directed by market regulator SEBI to follow the standard procedure, which typically involves a 90 to 135-day period before the issue can be launched.

Vora confirmed that UPL will imminently file the DRHP in compliance with SEBI’s directives.

Furthermore, UPL has outlined a capital expenditure (Capex) plan amounting to USD 210 million for various initiatives, including capacity expansion, seed, crop protection businesses, and specialty chemicals ventures.

Vora elaborated that the company initially budgeted Rs 4,000 crore for Capex in FY23 but ultimately spent around Rs 2,000 crore.

Of the total Capex, approximately USD 80 million is earmarked for tangible asset additions, primarily focused on capacity enhancements. 

The remaining funds will be allocated towards intangible assets, such as product registration, as well as investments in seed, crop protection, and specialty chemicals segments.

UPL’s forthcoming rights issue and Capex plans signify the company’s commitment to strategic expansion and fortification of its market position in the agrochemicals sector.

With a meticulous approach towards financial planning and growth initiatives, UPL aims to capitalize on emerging opportunities and drive sustainable value creation for its stakeholders.

Disclaimer: This information is covered based on the latest research and development available. However, it may not fully reflect all current aspects of the subject matter.

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