The year 2024 has seen a significant number of corporate demergers across various industries. These strategic moves aim to streamline operations, unlock shareholder value, and enhance focus on distinct business verticals. Below is a summary of nine companies that have announced demergers this year, as highlighted in an ET report referencing IIFL Securities.
Demerger
1. ITC Limited – Demergers
ITC has approved the demerger of its hotels business into a separate entity under a structured scheme of arrangement. The company will retain a 40% stake in the new entity, while the remaining 60% will be directly held by ITC’s shareholders in proportion to their existing shareholdings in the parent company.
2. Quess Corp – Demergers
Quess Corp announced a plan to divide its operations into three independent entities:
- Digitide (focused on GTS),
- Bluspring (covering OAM and PLB),
- Quess (handling WFM and other remaining businesses).
3. Raymond Limited – Demergers
Raymond’s Board of Directors approved a demerger plan involving the separation of its real estate division into RRL, a wholly-owned subsidiary of Raymond. Additionally, the company plans to reduce and cancel Raymond’s paid-up share capital in RRL as part of the process.
4. Texmaco Rail & Engineering – Demergers
Texmaco Rail & Engineering’s board sanctioned a scheme of arrangement to demerge its operations. This initiative separates Texmaco Rail & Engineering (the demerged entity) from Belgharia Engineering Udyog (the resulting company), along with provisions for their respective shareholders and creditors.
5. Shankara Building Products – Demergers
The demerger initiative by Shankara Building Products entails separating its operations into two distinct entities:
- Shankara Building Products (the demerged company),
- Shankara Buildpro (the resulting company).
This arrangement also accounts for shareholder and creditor interests.
6. Aditya Birla Fashion and Retail (ABFRL) – Demergers
ABFRL has approved the demerger of its Madura Fashion & Lifestyle business, which will be transformed into a standalone publicly listed company.
7. Tata Motors – Demergers
Tata Motors has initiated a demerger plan to form two separate publicly listed companies:
- One focused on its Commercial Vehicles business and related assets,
- The other dedicated to its Passenger Vehicles segment, encompassing PV, EV, and Jaguar Land Rover (JLR), along with associated investments.
8. Siemens – Demergers
Siemens’ promoters have proposed a potential demerger of the company’s energy business, suggesting the formation of a new standalone entity to sharpen the focus on energy operations.
The wave of demergers in 2024 reflects a broader trend of businesses aligning their structures to adapt to market demands and enhance operational efficiency. These moves not only optimize resources but also create opportunities for investors to explore more targeted growth avenues.
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