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India's Demerger Wave Hits Decade Peak as Markets Punish Conglomerate Complexity
Indian corporates split divisions into standalone entities at the fastest pace in a decade, with 29 deals worth roughly $40 billion recorded in 2025 alone. Vedanta, Tata Motors, Hindustan Unilever, Natco and Jubilant Agri all feature.
A decade-high year for corporate splits
India recorded 29 demerger deals in 2025 worth more than $40 billion — the highest annual tally in LSEG data going back to 2015. A Business Standard analysis of the data shows 50 deals over the past three years, including the running 2026 count, with aggregate value approaching $43 billion. The 2026 tally already stands at five additional deals worth $764 million as of May.
Who is splitting up
Vedanta's plan to carve itself into five separate entities — Vedanta, Vedanta Aluminium, Vedanta Power, Vedanta Iron and Steel, and Vedanta Oil and Gas — sits at the centre of the recent flow. Tata Motors is separating its passenger and commercial vehicle businesses. Hindustan Unilever is hiving off Kwality Wall's (India), its ice cream unit. Natco Pharmaceuticals announced a demerger of its agrochemicals arm, while Jubilant Agri and Consumer Products is splitting its agriculture and consumer businesses. The unlisted space is moving too: Nirma and Ocular Enterprise are restructuring such that Ocular takes the chemical and consumer operations while Nirma retains stakes in Karnavati Holding Inc and Alivus Life Sciences, formerly Glenmark Life Sciences, per a Crisil note.
Why complexity no longer pays
The conglomerate discount has become the operative pricing reality. Investors want focused businesses, cleaner capital allocation, independent management, sharper strategy and clearer performance metrics. Demerging lets each unit pursue its own shareholder base and growth path, with the discount stripped out. Mergers tend to draw scepticism because they often disappoint and pile on integration costs. Demergers carry the opposite presumption.
Emerging markets take the lead
The Indian surge is part of a wider rotation. Emerging markets recorded 72 demerger deals worth $122 billion in 2025, against developed-market peaks of more than 100 deals in 2015 (139) and 2021 (106), each exceeding $200 billion in value. By 2026, 11 emerging-market demergers worth $1 billion had been logged through May 6 — 75 percent of global demerger value by then, against a baseline near zero a decade earlier. The rise in EM activity is happening as developed-market splits slow.
What is driving the shift
A new cohort of promoters is taking over from the founders who built sprawling groups, and the incoming generation appears more convinced that simpler structures deliver better outcomes. Public markets reinforce the belief by assigning richer multiples to focused businesses. The older generation built conglomerates partly because pre-liberalisation India rewarded scale and political access — a single group structure made the licence system easier to work. The irony is that re-regulation in sectors such as energy and telecommunications may yet revive part of the old logic, leaving a residual case for the conglomerate model even as the demerger wave runs.
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