Indian Corporate Demergers
Overview of Indian Corporate Demergers
India is witnessing a strong surge in corporate demergers as companies restructure to unlock value, enhance governance, and sharpen business focus. In this article, we analyze recent major demergers in India – Refex Industries, Jindal Poly Films, BASF India, Apollo Hospitals, and Mukand – to understand their strategic rationale, M&A structures, and shareholder impact. These demergers reflect broader trends in India’s corporate restructuring landscape, ESG-driven capital allocation, and value-unlocking strategies.
Key Demergers in India
- Refex Industries – Green Mobility business separated from legacy coal/ash handling.
- Jindal Poly Films – Non woven fabrics division demerged into a dedicated subsidiary.
- BASF India – Agricultural Solutions (crop protection) business spun off.
- Apollo Hospitals – Omni channel pharmacy & digital health business demerged.
- Mukand Ltd – Stainless-steel cold-finished bars & wires business up streamed into holding company.
Deal-by-Deal Insights
Refex Industries Ltd – ESG Focused Strategy in Demerger
Structure: Composite scheme involving amalgamation of Refex Green Mobility Ltd (RGML) into RIL, followed by carve out into new Refex Mobility Ltd (RML).
Rationale: Separate green mobility (EV-based transport) business from coal/ash business to attract ESG-focused investors and enable dedicated capital raising.
Swap Ratio Details – Refex Industries
Swap Ratio / Consideration: 1 RML share = 1 RIL share; warrants conversion with price adjustment based on transferred net assets.
Financials & Risk: Green mobility contributes just ~1.18% revenue; business loss-making; requiring capital infusion.
Jindal Poly Films Ltd – Nonwoven Fabrics Demerger
Structure: Demerger of nonwoven fabrics into Global Nonwovens Ltd (GNL).
Rationale: Improve operational focus, scale business independently, unlock shareholder value.
Swap Ratio Structure – JPFL Demerger
Swap Ratio: 1 GNL share for every 4 JPFL shares.
Financials & Risk: Turnover ~₹670 Cr for FY 2025; unallocated assets/liabilities treatment unclear.
BASF India – ESG Driven Capital Allocation in Demerger
Structure: Agricultural Solutions business carved out into a new entity.
Rationale: Align with global strategy and enable independent capital structure and governance.
Swap Ratio: 1:1 share allocation.
Higher margins and performance but asset allocation concerns exist.
Apollo Hospitals – Healthcare & Digital Business Restructuring
Structure: 3-step scheme separating omnichannel pharmacy & digital health business.
Rationale: Create India’s largest listed pharmacy + digital health platform and reduce holding company discount.
Swap Ratio Mechanism – Apollo HealthTech
~195.2 HealthTech shares for 100 AHEL shares; further ratios for AHL & Keimed merger.
Mukand Ltd – Upstreaming Business for Value Unlocking
Structure: Stainless steel bars & wires business upstreamed by subsidiary.
Rationale: Simplify structure and enhance scaling capacity through parent company ownership.
Why Indian Companies Are Using Demergers
• Unlock value and capital efficiency
• Attract focused/ESG investors
• Improve governance and accountability
• Focus on high-growth specialized verticals
• Reduce complexity and improve transparency
ESG Driven Capital Allocation – Major Trend in Demergers
Companies like Refex and BASF India are aligning restructuring with sustainability-led investment strategies, enabling better access to ESG capital and future-ready growth.
Closing Insights – Future of Indian Corporate Demergers
India’s corporate restructuring landscape is evolving rapidly, and demergers are emerging as a strategic tool for value creation and shareholder alignment across high-growth sectors.
Indian Corporate Demergers are gaining momentum as a strategic tool for:
✔ Value unlocking
✔ Capital efficiency
✔ Governance improvement
✔ Sector-focused growth
As investors increasingly prefer focused and transparent business models, more companies will continue adopting demergers for long-term growth and strategic transformation.
Moreover, regulatory improvements, stronger capital markets, and rising ESG expectations are influencing boards to rethink corporate structures. With increasing market competition and global integration, Indian companies are likely to use demergers not just as restructuring events but as strategic moves to future-proof the business.
Frequently Asked Questions (FAQs)
What is a demerger?
A corporate restructuring where a business unit is separated into a new independent company.
How do demergers affect shareholders?
Shareholders receive shares in the new resulting company, allowing direct participation in growth.
What are recent major demergers in India?
Refex, Jindal Poly Films, BASF India, Apollo Hospitals, Mukand.
