Re-rating will only happen if the uncertainty in core business i.e. aliphatic amines of BAL goes away, but even after that, market may not give similar valuations to both the businesses. When a better business gets de-merged, even if that business does well, the parent business will not get the same valuations.
Market will sort of see BAL as a holding company, but it will not be a case similar to Kama Holdings and SRF, or Bajaj Holdings and Bajaj Finance, because BAL will not be a pure play holding business, so my understanding is we may see valuations range somewhere in the middle of the spectrum. It could be similar to BSE and CDSL.
At then end of the day, market is supreme, so I will respect that, just my two cents.
Disc: Invested in Balaji Amines since May 2020.
| Subscribe To Our Free Newsletter |
