Kaveri Seed Company Limited has informed the Exchange regarding Acquisition of 30% Equity Holding in Aditya Agritech Private Limited, which is a subsidiary of Kaveri Seed Company Limited.
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Kaveri Seed Company Limited has approved the acquisition of the remaining 30% equity stake in its subsidiary Aditya Agritech Private Limited (AATPL), which it currently holds 70% in. The transaction will make AATPL a 100% wholly owned subsidiary. The total consideration is Rs. 23.59 crores, paid at Rs. 715 per share (including a premium of Rs. 705) for 3,30,000 equity shares. AATPL is engaged in marketing and production of hybrid seeds including Bt. Cotton, with a turnover of Rs. 107.4 crores in FY 2024-25. The deal is a related party transaction as the Wholetime Director of AATPL has an interest in the sale, and completion is expected within 12 months.
This is a consolidation move that gives Kaveri Seed full control over its subsidiary, allowing streamlined decision-making and capturing 100% of AATPL's profits. For shareholders, it signals management's confidence in the subsidiary's growth, though the premium paid (Rs. 705 per share on a Rs. 10 face value) is significant. The related-party nature of the deal may attract shareholder scrutiny on pricing fairness.