SRF Ltd. , a diversified chemicals company, has outlined its strategy for potentially demerging its performance films and foils business. The company's Chairman and Managing Director, Ashish Bharat Ram, revealed that the demerger would be considered once the division achieves an annual EBITDA of ₹1,000-1,200 crore.

Business Structure and Performance

SRF operates through three main business verticals:

1. Chemicals
2. Performance Films
3. Technical Textiles

The technical textiles division currently serves as the primary cash generator for the company, with its proceeds funding growth in the chemicals and packaging divisions.

Financial Performance

The performance films and foils business has shown promising results:

Management's Perspective

SRF's management is carefully weighing the pros and cons of a potential demerger. They are considering the trade-off between:

• Immediate value clarity that could result from separating the business
• Potential higher returns through internal capital redeployment

Stock Performance

SRF shares responded to this news with a slight dip:

• Closing price: ₹2,897.00 (down 1.5%)
• Year-to-date performance: 31% gain

The market's reaction suggests that investors are processing the implications of the potential demerger and its impact on the company's future growth strategy.

Conclusion

SRF's consideration of demerging its performance films and foils business highlights the company's focus on strategic growth and value creation. As the division approaches the target EBITDA, investors and market watchers will likely keep a close eye on SRF's next moves and the potential restructuring of its business segments.

Kotak Mahindra Mutual Fund has recently increased its stake in SRF Limited , crossing the 5% threshold of the company's issued equity share capital. This move highlights a significant change in the ownership structure of SRF Limited, a key player in the Indian market.

Acquisition Details

The mutual fund acquired additional shares through its schemes via open market purchases. Here's a breakdown of the transaction:

Regulatory Implications

The acquisition is noteworthy as it pushes Kotak Mahindra Mutual Fund's holding above the 5% regulatory disclosure threshold. This milestone triggers certain disclosure requirements under Indian securities regulations, ensuring transparency in significant shareholding changes.

Company Overview

SRF Limited has a total equity share capital of 29,64,24,825 shares, each with a face value of Rs. 10. The company operates in various sectors, including technical textiles, chemicals, and packaging films.

Market Implications

This increased stake by Kotak Mahindra Mutual Fund may be seen as a vote of confidence in SRF Limited's future prospects. However, it's important to note that mutual funds often adjust their portfolios based on various factors, including market conditions, fund objectives, and investment strategies.

Investors and market watchers may want to keep an eye on any potential impact this ownership change might have on SRF Limited's stock performance and corporate governance. As always, it's crucial for investors to conduct their own research and consider their individual financial goals before making investment decisions based on ownership changes.