BASF India shares rose over 5% in early trade on December 20 after the board approved splitting its agriculture solutions business into a separate listed entity.
The move is in line with German parent BASF SE’s decision to separate the agriculture solutions business by 2027. The Indian entity said BASF SE is also preparing for a potential initial public offering (IPO) of its global agriculture solutions business, and is also evaluating the option of listing a ‘minority share’ in the mid-term. BASF India said it will assess the implications of the new strategy for its India business.
The BASF India statement said it has “given its in-principle approval for the splitting of the company’s agriculture solutions business into a separate listed legal entity. This will help provide operational flexibility, leverage differentiated operations and enhance value creation.”
“Following the recommendation of the independent committee, audit committee and approval of the board of directors of the company, necessary announcements and disclosures will be made in a timely manner as per SEBI Listing Regulations and other applicable laws,” BASF India’s statement said.
In December 2023, BASF India had informed stock exchanges about plans to simplify the global agriculture solutions business. The agriculture solutions segment contributed 17% to September quarter revenues, second only to nutrition and care. BASE India managing director Alexander Gerding had recently said the group expects 80% of the chemical market growth over the next 10 years to come from seven countries, and all seven countries are in Asia, one of which is India.
BASF India has a market capitalisation of over Rs 25,000 crore and its shares are up 90% so far this year. The company reported a 15% sales growth in the September quarter, mainly led by volume growth.
The agrochemical segment performed well in the first half of the fiscal with sales of Rs 1,400 crore, a growth of over 10% over last year. The company is optimistic about its long-term growth potential in India, driven by domestic consumption trend and young demographics.
BASF SE is streamlining the German manufacturer to generate profit from its core chemicals, industrial and nutrition businesses, as well as considering asset sales in its other units, including agriculture and battery materials.
BASF SE CEO Markus Kamieth is attempting to steer the company as it deals with high energy prices following the Russia-Ukraine war.
