CESC: Analysts see benefits even in part demerger, stock price recovers

Though split of power segment is still awaited, separate listing of retail and other businesses will help unlock value

The long-awaited value unlocking in CESC is finally taking place and bringing joy to investors as the stock price has started to recover. Since multiple businesses under a single umbrella resulted in holding company discount (when a firm owns various businesses under subsidiaries, the market typically values the latter at a discount), and thus impacted overall valuations, CESC’s decision on separate listing of all businesses should result in value unlocking for investors.

After the company’s announcement of restructuring last year, the stock had seen highs in January 2018, but it trended lower thereafter.

With the process getting delayed given CESC awaited approval