GFL limited - special situations

GFL is holding company which is going through corporate restructuring and
forced selling due to excess supply after it spun off its chemical business,
resulting in very attractive special situation investment opportunity.
Currently, the stock trades at ₹72, market capitalization of 791Cr.

The Company historically has been called Gujarat Fluorochemicals Limited or
GFL and this Company has been engaged in the business of the manufacturing
of chemicals.
In addition to this chemical business, GFL is also carrying on some other
businesses through its investments in two listed and one unlisted entity. It
holds a 51% stake in INOX Leisure Limited which is engaged in operating a
national chain of Multiplex Cinema Theatres. It holds 57% stake in INOX Wind
Limited which is engaged in the business providing turnkey wind energy
solutions to its customers who are primarily IPPs. And it holds 100% stake in
INOX Renewable Limited which is engaged in the business of generation of
electricity through renewable source.
The company demerged its chemical business into a separate listed entity
named as ‘Gujarat Fluorochemicals Limited ‘.
Post de-merger the name of this Company was changed from Gujarat
Fluorochemicals Limited to GFL Limited (Parent Company) and the name of the
mirror image company, to which the chemicals business was transferred, was
called Gujarat Fluorochemicals Limited (Spun off company).
GFL Limited currently has market capitalization of approximately 798 Cr.
whereas before demerger it was near about 10000 Crores.

There has been a lot of forced selling from the investor who invested only for
the chemical business.
The company holds assets as following:
• Inox Leisure 51% stake – approx. 1600 Crore rupees
• Inox Wind 57% stake – approx. 750 Crore rupees
• Inter corporate deposits with the 2 listed group firms – 890 Crore rupees
The company is trading at holding company discount of over 75%.

Now in the current Financial Year, there is another restructuring. GFL does not
have any operations of its own but now it owns 2 major businesses through its
subsidiaries. It owns the entertainment business through 51% stake in INOX
Leisure Limited and it owns the renewable energy business through 57% stake
in INOX Wind Limited and 100% stake in INOX Renewables Limited. Now the
Board of Directors, as a part of the business restructuring program, at the
meeting in March approved a Scheme which comprises essentially of two
• Part A is the amalgamation of the wholly owned subsidiary INOX
Renewable Limited into GFL and the appointed date for this is 1st April
• Part B is the de-merger of the entire renewable energy business which
essentially comprises of the undertaking of IRL which would be merged
in GFL and the equity shares that GFL owns in IWL, into a separate
company, a mirror image company, called INOX Wind Energy Limited, or
IWEL, which would be formed essentially for the purpose of vesting the
renewable energy business.
Note: The appointed date is 1 st April 2021 and 1st July 2021 for Part A
and Part B.
IWEL would be a mirror image company of GFL and therefore instead of
owning a share in GFL, which owns both the wind business and the leisure
business, the Shareholders will end up owning shares of equivalent proportion
in GFL which would then own just the entertainment business and IWEL which
would own the renewable energy business. And IWEL would be separately
GFL’s team has been indicating their intent of merging the two holding
companies into their respective listed entity through conference calls.
Resulting in no holding discount.
Disclosure: Invested (80% of the portfolio)


Record date for issue of IWEL was 30 Mar 2021 (correct me if I am wrong). Means present GFL Ltd trading in exchange only has entertainment business…


scheme B This was scheme B… source concall transcript…


Interesting bet. How have you valued the co post all the demergers and collapsing with respective operating cos…does it reflect 3x the current valuations ? Or am I making a wrong presumption somewhere…

After all the demerger, GFL will still continue to be holding company of Inox leisure ltd, so holding company discount will continue to exist?

Please let me know if i am thinking in correct direction

What would be the point of holding a holding company with single operating company, I guess it will be collapsed as indicated in the concall.

You are right if it doesn’t collapse there is no value because holding company trades at 50% discount and doesn’t follow law of summation

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