Grasim's 'Holding company' discount may widen

Grasim Industries has gained spotlight as the shareholders cleared the amalgamation of Aditya Birla Nuvo (ABNL) with the company. With a nod from shareholders on the demerger and thereafter separate listing of the financial services business, ABNL's merger with Grasim is not far. However, if analysts are to be believed, the street may assign a higher holding company discount to the combined entity, thereby capping further gains.

When companies own equity stake in businesses or when they own diverse businesses (directly or indirectly), the market tends to value such companies at a discount to the total value of the businesses.

Grasim has