The board of directors of BASF India Ltd. approved on Thursday the demerger of its agricultural solution business into a separate listed entity, according to an exchange filing.
The demerger will help in facilitating operational flexibility, leveraging differentiated steering and creating value. In the last financial year, BASF made a sales of Rs 2,006.5 crore through its agricultural solutions business, representing 14.6% of the total revenue of the company, it said.
BASF has also formed a committee of independent directors to explore and examine the various details of the demerger.
In September, BASF India's parent firm, BASF SE, has approved the demerger of its agricultural solution business by 2027. The demerger focuses on the approach of empowerment, differentiation and simplification, the filing said.
The German parent is also preparing for initial public offering of its global agricultural solutions business along with examining the options of "listing of a minority share in the mid-term".
Shares of BASF closed 2.16% lower at Rs 5,460.45 apiece on the National Stock Exchange, compared to a 1.02% decline in the benchmark Nifty. The share price has advanced 78.08% on a year-to-date basis.
An analyst tracking the company has a 'hold' rating on the stock, according to Bloomberg data. The average of 12-month analyst price target indicates a potential upside of 4.5%.
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