UPL may touch Rs 600, says SP Tulsian

SP Tulsian of sptulsian.com told CNBC-TV18, "The news in UPL is a long awaited news. In fact, I have been waiting to see this happen maybe for the last couple of years. Firstly, it will create an integrated player of seed, agro-chemical, everything. Number two, it will be a Rs 25,000 crore company. Advanta has a very strong presence in the global markets. They do not cater so much in India. In fact, all of them, their things are coming in from Europe, Latin-America, Africa and all that and they have a very strong presence.""In many of the seeds, I will not be going into the details of all those things, but the interesting part which is will be watching is what will happen to the 47 percent stake. Of the promoters, UPL Shroff families are holding 57-58 percent stake in Advanta of which 47 percent are held by UPL and then 10-11 percent are held by the individuals, promoters. So, what they will do, whether they will extinguish those shares, logically, they should extinguish those shares. But, people we have seen promoters creating a trust and parking that in a different trust names and all that. I do not think that that should be the method they should resort to, number one.""Number two, if you really see Advanta, they have about 58 percent promoter, 20 percent is about FII holding, about 15 percent are the depository receipts, American depository receipts (ADR), global depository receipt (GDR). So, practically, float is very low in the Advanta and that is why you see the huge volatility also in the share price. It goes up by Rs 50 in one week, comes down. So, that volatility will stop, number one, UPL then will get an integrated agri player which will be the compulsion for all the large investors to come into and look to the stock," he added."It has a market cap of Rs 3,500-4,000 crore while UPL will become a Rs 25,000 crore company. It all depends in the swap ratio because that is what I say because ultimately, because they have to eventually, they should extinguish the promoter holding which is held by UPL. So, I do not know how that, ultimately it will all be market linked share price only. But, I take this as a very positive move, and this is in fact, maybe a belated, but right move now. And I think that post this merger, UPL will get vastly rerated and there is no point in taking a call now on Advanta because we all know that it is a matter of time and Advanta will be history.""If you really want to take a call on UPL, I will not be surprised to see a price of maybe about Rs 600 maybe in six months, once this process is completed, because such process takes time, maybe about six months or so. So, take this whole swap ratio, as I said, I am not too keen because ultimately, if you are extinguishing the 47 percent held by UPL, there is no reason for giving the higher swap ratio to the other shareholders because that will be again detrimental to the interest of the Shroff family who are the promoters of UPL.""So, take ball-park as 1:1 swap ratio or maybe 1.1:1, I am not too fussy on that, because that does not make any difference, but ultimately, I am taking this as a highly bullish move for UPL going forward as an investor," he said.