If a company has a float they can do alot. I would like to explain this with a few illustrations.
Using the float/exisitng business to fund new ventures.
Nestle using cash from child care food products and maggie. This is a continous engine to innovate. Now launching healthier variants of maggie etc etc
ITC with cigarette business. Now can afford to own some of the finest Real estate assets too!
Reliance inds with oil funding jio.
This why capital allocation is very important. If roce is high that shows mgmts ability to deploy capital at high rates of return. This in turn mostly means that the float is being deployed well.
Any disruptor can be aquired with ease by these cos. Look at britannia launching a fund to fund start ups in food. Imagine what a startup can do with britannias resources in the consumer space.
Look at cos with the capability of generating such floats in the future like a nesco. Like a page through jockey could end up creating a big float. Floats can be created via the cash flows of the company not the reported pat. One has to see how much incremental cash flow the company is generating that is why fmcg and consumer type businesses get such valuations. Of course todays are expensive but you get the point
Look for cos who have steady float type businesses with decent roces but are investing in newer verticals and ventures and hence roces are depressed on the face of it. The engine must be generating stable cash flows at high roces and the incremental cash must be moving into newer products and ventures. People often wonder how to make alot of money, its when you find these sorts of businesses because they are overlooked due to poor metrics. And once investments start to pay off we see operating leverage take over and margins expand. Hence roces go up etc etc: