SKF India shares adjust to demerger: Why you should ignore the 54% plunge

"The demerger, first approved by the Board in Q4 2024 and subsequently cleared by shareholders and regulators, marks a defining milestone in SKF India’s century-long journey of enabling reliability and performance across industries," the company had said.

Each shareholder will receive one shares of SKF India (Industrial) for every share they currently hold in SKF India, the company had said. "The rationale reflects a considered approach: aligning with India’s dual priorities of sustainable mobility and industrial competitiveness, enhancing financial visibility, and creating the agility to respond faster to customer needs and sectoral dynamics," it added.

SKF India demerger: Record date

The company had fixed October 15 (today) as the record date to determine the eligibility of the shareholders set to participate in the demerger scheme.

SKF India said that the demerger was designed to sharpen the strategic focus and unlock long-term value for stakeholders by creating two fit-for-purpose companies with dedicated management teams, capital allocation frameworks, and sectoral priorities.

After closing at Rs 5,008.40 apiece on October 14, SKF India shares opened at Rs 2,300 apiece on October 15. This marks a sharp fall of more than 54 percent over just one day as the stock adjusted to the demerger.

What SKF India management says:

Speaking about the demerger, SKF India Managing Director Mukund Vasudevan said, "This demerger is a defining moment in SKF India’s journey. By creating two focused and independent companies, we are aligning ourselves with India’s twin growth engines— industrialization and mobility. SKF Industrial will strengthen its role as a key backbone of India’s manufacturing growth, infrastructure development, railway network expansion, and renewables (wind) focus. SKF Automotive will scale with the EV, last-mile commercial vehicle and premiumisation wave. This structure strengthens our ability to allocate capital effectively, accelerate innovation, and create distinct value streams for customers and shareholders, while contributing meaningfully to India’s economic transformation."

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