UPL Share Crash: What did the company say in the restructuring announcement that caused the stock to crash, crores lost, what next?

News Topical, Digital Desk : Shares of UPL, a major agrochemical company, saw a sharp decline. The announcement of a major restructuring plan by the company sparked panic in the stock market, putting the stock under intense pressure. Compared to a closing price of ₹752, the stock opened at ₹714 and fell to ₹650. The company is calling this a shareholder-friendly move, but the market's initial reaction has raised investor concerns.

A sharp decline in UPL shares has rattled the market. Following the company's announcement of a major restructuring plan, investors sold heavily, putting the stock under significant pressure. The stock opened at Rs 714, down from its closing level of Rs 752, and within a short time, it fell to around Rs 650. This decline affected investors' value worth crores of rupees. In fact, UPL has approved its group reorganization plan, under which the company is going to make major changes to its entire business structure. Management states that this step has been taken to make the business more focused and accelerate global growth. However, the market initially received this news negatively. 

Under the new structure, UPL Sustainable Agri Solutions Limited will be merged with UPL Ltd. Additionally, the company will separate its crop protection business through a vertical demerger. UPL Corp, the international crop protection business, will be merged with UPL Global. This will result in the formation of a new listed company – UPL Global Sustainable Agri Solutions Ltd., which aims to become a global pure-play crop protection leader. The plan also includes several significant changes for shareholders. The first phase will involve the merger of UPL SAS with UPL Ltd, issuing 1,000 shares for every 48 shares held. The second phase will involve the demerger of UPL Global from UPL Ltd, where UPL Ltd shareholders will receive one UPL Global share for every 1 share held. The third phase will involve the merger of UPL Corp with UPL Global, issuing 1,000 shares for every 213 shares held. The company's focus is on unlocking value through this process. Management states that separating the business into different platforms will provide greater transparency to investors and reveal the true value of each business. Furthermore, the company expects strong long-term performance through global growth and a focused strategy. However, this entire process will take time. According to the company, the restructuring plan is expected to take approximately 12 to 15 months to complete. This will also require several regulatory approvals, including from the SEBI and NCLT. This means investors may need to take a long-term view rather than focusing on immediate impact. For now, the stock market's reaction clearly indicates that investors are cautious about this major change. It will be crucial to see in the coming months whether the company's strategy truly unlocks value.

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