I had highlighted in Nov 2022 that the sale of the HFC could be a potential rerating event for the company. I had estimated a minimum valuation of Rs1,050 crore for the HFC based on that of peers and comparable M&A transactions. Seems like ICFL has been able to get a much higher valuation for the HFC than my estimate. The market may value ICFL’s residual business at a higher P/BV due to this transaction. Considering the presence of Brookfield as a promoter, the possibility of proceeds from the sale of the HFC being frittered away or siphoned off as that happened in some other companies is also low.
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