Demerging non-core biz a positive for Unitech: Tulsian

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Demerging non-core biz a positive for Unitech: Tulsian

In a move to unlock value in the non-core business, India’s leading real estate developer, Unitech is considering to demerge the business, sources told CNBC-TV18. In an interview with CNBC-TV18, SP Tulsian gave his perspective on Unitech's move and the value it would create for shareholders.

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Excerpts from What's Hot on CNBC-TV18 Watch the full show » RELATED NEWS Unitech considers demerger of non-core biz: Sources ALSO READ See latest News about Unitech See previous management interviews See what other Experts & Brokerages are saying about Unitech Unitech BSE | NSE 10/02/12 Are Mutual Funds betting on Unitech?

In a move to unlock value in the non-core business, India's leading real estate developer, Unitech is considering to demerge the business, sources told CNBC-TV18. The demerged entity may include telecom, hotels as well as special economic zones (SEZs). However the final decision or announcement is likely to be made in three to four weeks.

In an interview with CNBC-TV18, market expert SP Tulsian, sptulsian.com gave his perspective on Unitech's move and the value it would create for shareholders.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: What do you think of this move by Unitech, is it good or bad for the stock?

A: I think this is good for the stock because everyone is hunting for ideas to do value creation. Here as you have said that they are thinking of putting non core business in a separate company. But in my view there has to be 2-3 companies separately created for that because telecom has to be in one basket where right now they are holding about 32.75%, the valuation which is estimated at about Rs 3,000 crore.

Hotels are again a recent flavour. We have seen there are huge numbers of potential acquirers or suitors for those things. In the past companies have tried to put each hotel on the block but they have not succeeded much on that. So if they pool all their hotel properties in one company that could again be a good idea.

Third is the infrastructure because they have a SEZ and roads and we have been seeing renewed interest in the infrastructure sector. So three logical separate companies come into the picture on account of telecom, hotels and infrastructure.

And then how they distribute their debt of Rs 8000 crore has to be seen. But we have always seen that whenever the demerger has happened eventually it has resulted in value creation for the shareholder.