By AltG Investment Research Lab On Behalf Of Poornima Vardhan & Taponeel Mukherjee
Unveiling Hidden Gold: Which Corporate Carve-Outs Offer Lucrative Investment Opportunities?
The 90% rally in the SENSEX over the last five years and the euphoria in India’s mid-cap and small-cap stocks haven’t lifted all boats.
A slew of publicly listed businesses have delivered negative returns over the last five years, constrained by operational issues, cost inefficiencies, Poor Capital Allocation, and Sub-Optimal Capital Structures.
Many of these agriculture, paper, retail and education businesses have fundamentally solid economic franchises that need a rejig that a quarterly return-focused public company structure doesn’t quite allow.
What do these businesses have going for them structurally? Significant revenue growth, structural social and technological tailwinds driven by rising incomes, favourable demographics, and a global export market open to India.
In a market where private capital has struggled to get attractive entry multiples on investments, given the high PE ratios in India, we see significant value creation opportunities in the so-called “unloved businesses”. In fact, we see a goldmine!
We see significant value in unlocking opportunities by taking quite a few of these lagging businesses private, fixing them up, and setting them up for exceptional growth.
For private capital investors, India’s public markets present some exceptional bargains and value unlocks.
Disclaimer: In the article "The 101 on Indian Corporate Carve - Outs And Its Investment Opportunities" above - Any views, comments or communication (above or in the past) should not be construed to be investment advice by Alternative Growth (hereafter referred to as “AltG”) in any form whatsoever. AltG does not make an offer to sell or solicit to buy any securities.