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Time for reorg: India Inc rides merger-demerger wave
Business Standard
|October 12, 2023
Corporate India is busy restructuring through mergers, demergers and splits. That seems to be the new normal as CXOS and boards brainstorm on how to create assets and value. The pitch rose significantly during the third quarter of this financial year (FY24), translating into $32.9-billion worth of such deals the highest quarterly total since the HDFC Bank-HDFC merger announced in FY22 Q2.
Deals create shareholder value and give synergy benefits, executives explained. Supratim Dutta, executive director and chief financial officer of ITC Ltd, said the group's hotel business had matured and scaled up over the years and was now poised to chart its own growth path.
In August, a scheme of demerger was approved amongst ITC, ITC Hotels and their shareholders as well as creditors. ITC Hotels had merged with ITC Ltd in 2004 to consolidate the group's hotels business and scale it up.
Besides ITC, energy to telecom conglomerate Reliance Industries was among the major groups opting for a restructuring recently. RIL's $18.4-billion split of its financial services arm, Jio Financial Services, is the largest deal involving an Indian company this year. The merger of IDFC Ltd and IDFC FIRST Bank and the demerger of Jio Financial Services accounted for more than 60 per cent of the September quarter deal value of $32.9 billion.
This story is from the October 12, 2023 edition of Business Standard.
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