Conglomerates often house diverse businesses under one roof—Reliance with Jio and Retail, or Tata Motors with commercial vehicles and passenger vehicles. But this diversity makes it difficult to sharpen focus. On top of that, markets typically apply a “holding company discount,” valuing a conglomerate lower than the sum of its parts.
To unlock hidden value, companies frequently spin off or demerge units. The result? Sharper management focus, cleaner capital allocation, and the removal of the discount—all of which can boost returns.
Post-demerger, if the underlying business is strong and execution solid, investors often see outsized gains. PayPal’s 2014 split from eBay is a classic global example. In India too, corporate breakups have turned into wealth-creation machines.
Here are three demergers that rewarded investors handsomely.
Nuvama Wealth
Nuvama was demerged from Edelweiss Financial Services in 2023. The demerger was intended to unlock shareholder value and reposition Nuvama as an independent wealth management platform that was poised to capitalise on the sector’s strong tailwinds.
And the strategy worked. The company’s share price listed at ₹2,750 in September 2023 and rose to ₹8,508 by June 2025, giving investors more than three times return. However, since then, it has fallen 20% to currently ₹6,789.
Strong financial performance post listing fuelled the rally. Nuvama today is India’s second largest wealth management company, serving high-network individuals (HNIs), ultra-HNIs, affluent individuals, corporates, and individuals.
It provides financial services including product distribution, wealth advisory, investment banking, and asset management services. As of Q4FY25, the company manages total client assets of ₹4.3 lakh crore, which includes asset management ( ₹2.9 lakh crore), asset services ( ₹1.2 lakh crore) and asset management ( ₹11,307 crore).
The company’s revenue grew 41% year-on-year (YoY) to ₹2,901 crore in FY25, driven by strong growth in client assets, particularly in wealth management. Assets in this segment grew 18% to ₹2.9 lakh crore, while revenue grew 20% to ₹1,428 crore.
The segment accounts for 49% of revenue, while asset service (22.6%), and capital market (26.2%) contribute the rest. Consequently, Nuvama profit after tax (PAT) also grew 57.6% to ₹985 crore, as the cost-to-income ratio fell 7% to 55%. With growth in client assets, the company is gaining with operating leverage.
With scale benefits and rising client assets, the company is beginning to benefit from operating leverage. Return on Equity (RoE) expanded by 800 basis points (bps) to 31.5% in FY25.
Looking ahead, the company is banking on the wealth management sector, which is expected to grow threefold in India over the next few years. The company plans to grow client assets at over 20% annually in the coming years. To tap the growing demand, it is expanding beyond tier-1 cities, and aggressively hiring relationship managers.
IIFL to 360 One
In May 2019, as part of a corporate restructuring, IIFL Finance hived off its wealth markets business, IIFL Wealth, as a separate entity. The demerger was designed to unlock value and focus separately on lending and wealth. Soon after, the company got listed as India’s only pure wealth management entity in September 2019 at ₹248.5.
It was then renamed as 360 One WAM in January 2023. The stock rerated after listing, with the shares touching a high of ₹1,310 in January 2025, giving a return of around 500% in about 5 years. Currently, it is down 16% to ₹1,100. Despite the correction, the long-term performance remains robust.
The company’s total assets under management (AUM) grew at a 24% compounded annual growth rate (CAGR) from FY21 to FY25, reaching ₹5.8 lakh crore. This significant growth was primarily driven by its wealth division, whose AUM more than doubled from ₹2.1 lakh crore to ₹4.9 lakh crore in the same period.
Positively, more than half of this ( ₹2.4 lakh crores) is annual recurring revenue (ARR) AUM, which has grown at 27% CAGR during the period. This stickier component of AUM ensures better visibility and reduces dependence on cyclical revenues.
This is evident from its financials. While its revenue has grown at 28% CAGR from ₹915 crore (FY21) to ₹2,446 crore in FY25, ARR has grown at 31% to ₹1,701 crore. Today ARR contributes 70% of operating revenue, against 63% in FY21. Meanwhile, PAT has almost tripled to ₹1,015 crore from ₹369 crore in FY21.
Being a capital-light business, 360 One also has a strong RoE of 20.7%. To build scale and diversify, the company has been active on the merger & acquisitions front. This includes acquisition of B&K Securities, ET Money, and UBS India wealth business to drive growth.
Cohance LifeSciences
Suven Life Sciences demerged the profitable CRAMS (Contract Research and Manufacturing) business into a new entity called Suven Pharmaceuticals in 2020. The company was listed at ₹156 in March 2020, and hit a high of ₹1,360 by December 2024.
Since then, the company’s shares have fallen 40% to ₹902 now. But the bigger pivot came when global private equity major Advent International entered the picture. Advent, bought a 50.1% stake at ₹495 per share from the promoter. Alongside, it launched an open offer for an additional 26% of the shares, taking control of the company.
Beyond this investment, Advent merged Suven Pharma with Cohance LifeSciences, another contract development and manufacturing organisation (CDMO) company it owned, effective from May 2025. The merger aimed to create a diversified CDMO business that will provide end-to-end pharma solutions.
The open offer, and the merger potentially unlocked massive value for shareholders. Today it is one of the leading companies in the CDMO sector in India. In parallel, the company revenue tripled, from ₹834 crores in FY20, to ₹2,608 crores in FY25, while PAT surged 53% to ₹484 crores.
The merged entity is now aiming to triple revenue again, targeting ₹6,000 crore by FY29 through scale, innovation, strong demand for CDMO and new client additions.
Conclusion
Demerger stories like Nuvama, 360 One, and Suven Pharma show how value often gets unlocked when businesses are given room to operate independently with sharper focus, leaner management, and capital. What may begin as a structural rejig often ends up creating room for more agile, growth-hungry entities to thrive.
And this trend isn’t slowing down. Several recent listings include Aditya Birla Lifestyle Brands (from ABFRL), Digitide Solutions, and Bluespring Enterprises (both from Quess Corp). Some big-ticket demergers are still in the pipeline.
For more such analysis, read Profit Pulse.
Reliance Industries is expected to list its Jio and Retail arms separately, Tata Motors is splitting its CV and PV businesses, DCM Shriram is carving out its chemical and rayon divisions, and HUL is hiving off the Kwality Ice Cream business.
For investors, it’s a space worth keeping a close eye on. Because sometimes, it’s not synergy but separation that sets the stage for real wealth creation.
Madhvendra has over seven years of experience in equity markets and writes detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments.
The writer does not hold the stocks discussed in this article.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
