M-cap of 2 demerged entities could exceed Piramal's by 10-15%: Analysts

Analysts say the demerger will make it easier for investors to value the two companies

Piramal Enterprises’ (PEL’s) announcement of demerging its pharmaceuticals business and create two independent listed entities focused on financial services and pharma is expected to be positive for the company’s shareholders.

Analysts expect the combined market capitalisation of the listed entity to exceed the current market capitalisation of the company.

“Conglomerates always get a discounted valuation compared to companies with a focused line of business. Given this, PEL’s decision to demerge it into two independent companies is a positive move and will be value accretive in the long-term,” says Shailendra Kumar, chief investment officer at Narnolia Securities.

After the demerger, PEL will become a