United Phosphorus shuffles holdings of group companies

United Phosphorus shuffles holdings of group companies

Mumbai: Uniphos Enterprises Ltd, a holding company of United Phosphorus Ltd, India’s largest agrochemical firm by sales, has transferred 11.18% stake to the group’s privately owned Nerka Chemicals Pvt. Ltd.

Nerka’s holding in Uniphos has increased to 12.81% from 1.63%, but it was not immediately known if there would be a corresponding change in its holding in United Phosphorus, or if shareholders would benefit from the share transfer.

Uniphos currently holds around 6.34% shares in United Phophorus, while Nerka owns some 0.95%.

United Phosphorus informed Bombay Stock Exchange (BSE) on Thursday that the transaction was part of a strategic planning within the group. Retail investors hold 19.7% stake in Uniphos, which was earlier active in the agrochemicals before the business was shifted to United Phosphorus. Promoter holding in Uniphos is 45.53%, and institutional investors own the remaining.

Jai Shroff, executive director, United Phosphorus, declined to give details of the group’s so-called strategic planning.

Chief financial officer Rajendra Darak said the transaction was an internal transfer of shares among promoter group companies and not significant for the flagship company’s operations or equity base.

A sector analyst with a domestic brokerage, who didn’t want to be identified, said the group might be planning a merger of the two promoter companies—Uniphos and Nerka—after de-listing Uniphos.

“As a commonly beneficial arrangement, the group may also shift these entities into one of the active companies as subsidiaries, if taxation and account rationalization are not the purpose behind the move," he said.

Uniphos and Nerka are not active in any operation related to either the agrochemical operations of United Phosphorus or the seed business of Advanta India Ltd—the two key entities of the Shroff family-led United Phosphorus group.

The share price of Uniphos rose 5% on Friday to close at Rs15.75 on BSE, while the benchmark Sensex index went up 2.36%.

United Phosphorus shares rose 3.62% to close at Rs100.25 on BSE.

Since January, Uniphos shares have dropped 72.34% while United Phosphorus has lost about 42.52%.