Unlocking smart money! Demergers clock big gains for investors

economictimes.indiatimes.com:

At least six companies Edelweiss Financial, Shipping Corp of India, TVS Holdings, NIIT, GHCL and Forbes & Co returned a minimum of 50% after the demerger.

Edelweiss Financial Services, which demerged its wealth business into a separate company, Nuvama Wealth Management, was one of the biggest gainers. The market capitalisation of Edelweiss Financial on the adjustment date was Rs 6,281 crore, while the combined market cap of Edelweiss and Nuvama on Monday stood at Rs 34,579 crore, delivering a 450% return compared to Nifty's 35% during the same period. Nuvama was listed on September 26, 2023.


«Demergers allow companies to enjoy value creation across entities while subverting the Holdco discount, which would put a discount on the parent company's valuation if a direct subsidiary is listed,» said Gaurav Sood, head of equity capital markets at Avendus Capital.

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Shipping Corporation of India demerged its non-core business and