Demerger

Separating a business out of a group into a separately listed company, with shares distributed to existing shareholders in a fixed ratio.

A group whose chemicals arm is worth ₹6,400 crore and consumer arm ₹3,200 crore may be worth more as two listed companies than as one, because each is then valued on its own multiple and each management is accountable for its own capital.

The empirical record on spin-offs is reasonably favourable, and the usual explanation is that a business that was previously a small part of something larger receives management attention and analyst coverage it never had.

The value released is often the conglomerate discount closing. It was there all along.