UPL Demerger Plan Approved to Create Global Crop Protection Leader

UPL Announces Major Corporate Restructuring

UPL Limited, a global provider of sustainable agriculture products, announced on February 20, 2026, that its Board of Directors has approved a significant corporate reorganization. The plan involves a composite scheme of arrangement to consolidate its domestic and international crop protection businesses into a single, new entity that will be listed on Indian stock exchanges. This strategic move aims to create two distinct, focused companies to unlock shareholder value and streamline operations.

The existing listed entity, referred to as UPL 1, will continue as a diversified platform for agriculture and specialty chemicals, while a new entity, tentatively named UPL 2 or UPL Global, will become a pure-play global crop protection leader. The company stated this restructuring will create the world's second-largest listed pure-play crop protection platform.

The Three-Step Reorganization Process

The approved scheme is structured to unfold in three sequential steps to ensure a smooth transition and integration of the businesses. The process is designed to consolidate all crop protection assets under one umbrella.

Step 1: Amalgamation of UPL SAS The first step involves the merger of UPL Sustainable Agri Solutions Limited (UPL SAS), which houses UPL's India-focused crop protection business, into the parent company, UPL Limited (UPL 1). The appointed date for this merger is set for April 1, 2026.

Step 2: Demerger of India Crop Protection Business Following the initial merger, the India Crop Protection Business will be demerged from UPL 1 and transferred into the new entity, UPL 2 (UPL Global). This separates the core crop protection operations from the diversified chemical business within the Indian market.

Step 3: Amalgamation of UPL Cayman Finally, UPL Cayman, the holding company for UPL's international crop protection business, will be amalgamated into UPL 2. This final step consolidates the global crop protection assets with the Indian operations, creating a unified, global platform.

Strategic Rationale Behind the Demerger

The primary driver for this reorganization is to create distinct investment opportunities for shareholders and enhance operational efficiency. By separating the businesses, the company believes it can achieve clearer value discovery in the market.

Key objectives include:

• Unlocking Shareholder Value: Creating two listed entities allows investors to choose between a diversified chemical platform (UPL 1) and a focused crop protection leader (UPL 2), catering to different investment strategies.
• Simplifying Group Structure: The move simplifies a complex corporate structure by consolidating all crop protection activities into a single, integrated entity.
• Enhancing Synergies: It is expected to improve synergies across manufacturing, research and development, and global market access, leading to greater operational efficiency.
• Capital Flexibility: Both UPL 1 and UPL 2 will be able to raise capital independently, allowing them to pursue tailored growth strategies and optimize their capital structures.

Shareholder Entitlement and Key Stakeholders

For the demerger, shareholders of UPL 1 will receive one equity share of the new entity, UPL 2, for every one equity share held in UPL 1. For the amalgamation of UPL Cayman, its shareholders will receive 1,000 equity shares of UPL 2 for every 213 equity shares held.

Upswing Trust, an existing investor in UPL SAS, is set to become a significant public shareholder in the new entity, holding a 16.78% stake in UPL 2 post-listing. Additionally, the promoter and promoter group have agreed to a voluntary 18-month lock-in period for their shares in UPL 2 from the listing date, signaling their long-term commitment.

Overview of the New Structure

Management Commentary

Jai Shroff, Chairman & Group CEO of UPL, described the move as a milestone in the company's transformation. He stated, "This strategic reorganization...strengthens our ability to build and scale diversified businesses across agriculture and specialty chemicals...By unifying our India and international crop protection businesses under UPL Global, we are creating a future-ready platform with the focus, agility and innovation needed to lead in a rapidly evolving market."

Bikash Prasad, Group CFO, added that the structural simplification strengthens the company's financial foundation. "By driving deleveraging, reinforcing balance sheet strength, and improving return metrics, we are creating a sharper, more focused organization designed to deliver sustainable long-term value for all shareholders," he said.

Timeline and Regulatory Hurdles

The entire process is expected to take 12 to 15 months to complete. The scheme is subject to a series of approvals from regulatory bodies, including the Securities and Exchange Board of India (SEBI), the Competition Commission of India (CCI), the Reserve Bank of India (RBI), stock exchanges, and the National Company Law Tribunal (NCLT). It also requires approval from the shareholders and creditors of the companies involved.

Market Reaction

On the day of the announcement, February 20, 2026, the shares of UPL Limited closed at ₹751.50 on the stock exchange, marking a decline of 1.77% from the previous day's close. The market will be watching closely as the company proceeds with the necessary approvals for the restructuring.

Conclusion

UPL's decision to restructure its operations marks a significant strategic shift aimed at creating two more focused and agile companies. By separating its pure-play crop protection business, the company intends to provide investors with clearer choices, enhance operational efficiencies, and position both entities for independent growth. The success of this complex reorganization now hinges on securing the required regulatory and shareholder approvals over the coming year.