Bunty Bubbly.
With 18,434,799 cases sold, Bunty Bubbly Whisky was the highest selling country liquor brand in FY26
The company behind this brand is not United Spirits or Radico or Allied Blenders. It is a “green-chemicals” company in Kashipur, Uttarakhand, calledIndia Glycols. A business better known to the market for chemicals like glycols, glycol ethers and industrial gases than for the most popular Indian made Indian liquor (IMIL) brand in the country.
The whisky is only part of the story.
The same company is one of India’s larger ethanol producers, a direct beneficiary of the government’s fuel-blending push. It also makes nutraceuticals, nicotine and market-leading muscle-relaxant API. It also runs a specialty-chemicals franchise that counts L’Oréal, Dow and BASF among its customers.
Four very different businesses, one balance sheet, one share price. You can already guess where we’re going with this.
For decades the market resolved that confusion by valuing the whole thing as a mid-cap chemicals company on a low-teens multiple and moving on. In FY25 India Glycols decided to close this supposed undervaluation by splitting itself into three separate listed companies. And on 17 July 2026, the National Company Law Tribunal sanctioned the scheme.
For a special-situations investor, that is exactly the kind of moment worth stopping for.
Why demergers create value
For those who are unfamiliar with why demergers tend to unlock value, here’s a little primer.
When one listed company houses two or in this case four – very different businesses, the market rarely values it well. The investors who want the fast-growing branded business do not want the commodity chemicals attached to it. The analysts who cover consumer spirits brands have no framework for the commoditised ethanol business and perhaps nobody quite knows how to price a nutraceuticals arm buried three levels down in the same pile.
So the whole trades at a blended, compromise multiple that flatters the weaker parts and penalises the better ones. That is the ‘conglomerate discount’.
A demerger a.k.a ‘Spin-off’ seeks to reduce this discount. Each business starts trading on its own, attracts its own investors and analysts, gets its own management focus, capital allocation, balance sheet, and is freed from the others’ cycles. The discount tends to unwind. It works best when the parts are genuinely different in growth, margins, capital intensity and investor base which appears to be the case here.
India’s history is a long list of the ‘Demerger pattern’ paying off but it’s not a foregone conclusion.
Bajaj Auto’s 2008 split into Bajaj Auto and Bajaj Finserv created two giants worth many times the original whole.
Triveni Engineering carved out the Triveni Turbine in 2011. The spun-off child is now worth more than the parent.
Greenply demerged Greenpanel in 2019 and the MDF business ran up several times over in two years.
More recently, Reliance’s Jio Financial (2023), Raymond’s lifestyle split (2024) and ITC’s hotels demerger (2025) all told the same story.
While some have generated market beating returns, a few have not. For example, Raymond lifestyle ltd and ITC hotels have failed to substantially beat NSE 500 returns post demerger.
India Glycols has spent three decades assembling exactly this mismatch under one roof. A low-margin, capital-heavy chemicals base sitting next to a high-margin consumer spirits franchise, a policy-driven ethanol business growing 40% a year, and a small pharma arm. The market values the bundle as a chemicals company with some odds and ends attached. The demerger is the company’s attempt to make the odds and ends visible.
The scheme & How the split works
India Glycols is using a single composite Scheme of Arrangement (Sections 230–232 of the Companies Act) to break itself into three parts.
Currently, IGL has four businesses:
- Bio-based Specialities & Performance Chemicals (BSPC)
- Potable Spirits (PS)
- Bio-Fuel (BF)
- Ennature Bio (EB)
Their respective revenue and EBIT split along with EBIT margin profiles are as follows:
FY26 Business segment wise performance
It’s obvious that the Potable spirits segment is the attractive one basis the higher EBIT margin (although that’s not the best measure of how valuable a business is).
The proposed structure will split these four businesses in three separately listed units:
As shown above the Potable Spirits (PS) business (IMFL & IMIL) and the Bio-Fuel (ethanol) business are demerged together into a new company, IGL Spirits Limited (ISL).
The bio-pharma business, along with bio-polymers, is demerged into Ennature Bio Pharma Limited (EBL).
If you don’t know what these businesses do, what their prospects are etc don’t worry, we’ll get into it later on.
India Glycols – the currently listed entity keeps the chemicals business – glycols, glycol ethers, new specialties plus industrial gases. And once the scheme is effective, IGL will be, for the first time, a pure green-chemicals company.
For every share of India Glycols shareholders own on the record date, they receive 1 share of IGL Spirits (ISL). And 1 share of Ennature Bio Pharma (EBL) for every 3 IGL shares.
The net result is that shareholding will mirror IGL’s shareholding so there is no compression of the public’s stake, which is usually something to watch out for while evaluating demergers.
Interestingly,even in this case an earlier version of the scheme proposed to merge the promoter holding vehicle, Kashipur Holdings Limited (KHL), into India Glycols. That proposal was withdrawn and the “Modified Scheme” leaves KHL out, which simplifies the structure and avoids muddying the demerger with a promoter-entity amalgamation.
Where we are now.
Unlike Piccadilly Agro Industries’ proposed demerger, this is not a board announcement waiting on 18-24 months of process. It is literally at the ending stages.
The tribunal (NCLT Allahabad) sanctioned the scheme on 17 July 2026. What remains is procedural: filing the certified order with the exchanges, fixing the record date, and listing ISL and EBL on the BSE and NSE, which typically takes 1-3 months from the record date.
Timeline risk, in other words, is largely behind this one.
The four businesses & what goes where
Let’s delve deeper into each of these businesses.
IGL spirits itself will hold two segments as follows.
#1 Potable Spirits → IGL Spirits (the margin engine). This is the crown jewel. In FY26 it did ₹1,331 crore of revenue, up 14.4%, at a 21.4% EBIT margin and is comfortably the group’s most profitable business.
It is the market leader in country liquor (IMIL) in Uttar Pradesh and Uttarakhand, home to Bunty Bubbly, and it’s climbing the value chain fast, supported by a partnership with ‘Amrut’ to make and market premium whiskies on royalty basis and a strong new entry into the Canteen Stores Department (the military channel).
These measures have led to a 30% volume growth in the IMFL segment for the year. This is a consumer franchise that has spent its life hidden inside a chemicals ticker.
The PS margin climb from 13.5% to 21.4% is driven by three things, in order of importance:
- Country-liquor (IMIL) price hikes. This is the single biggest lever. According to CARE PS “EBIT margin improved by 470 bps to 22.0%” in FY25, “supported by country liquor price hikes.”
IMIL is government-regulated, so when states raise prices, most of it drops to the margin.
- Premiumisation / mix shift to IMFL. IMFL carries higher realisation than country liquor and has roughly doubled to ~a third of the segment (the Amrut partnership, new premium brands, CSD/military channel). A richer mix lifts the blended margin, and management is explicitly steering more of the book toward premium IMFL.
- In-house ENA. This is a structural cost edge. IGL uses only its own extra-neutral alcohol for its brands and its 3×3 feedstock flexibility (grain / molasses / import) lets it manage input cost. Owning the key raw material means the price hikes and premium mix aren’t eaten up by bought-in spirit. Even companies like Diageo and Radico Khaitan source ENA from IGL.
#2 Bio-Fuel → IGL Spirits (the growth engine).
Although ethanol was the group’s fastest-growing business in FY26, with Revenue up 40.9% to ₹1,470 crore and EBIT nearly doubling, it is fundamentally inferior to the spirits segment within PS.
Although ethanol was the group’s fastest-growing business in FY26, with Revenue up 40.9% to ₹1,470 crore and EBIT nearly doubling, it is fundamentally inferior to the spirits segment within PS.
Even in a good year where margins were 7.8% (owing to maize pricing coming down), they’re a third of the spirits business. Not to mention – India currently has excessive ethanol capacity. Third, prices are set by Oil marketing companies (OMCs).
A key trigger here would be the increase in EB20 blending targets. India hit 20% ethanol blending ahead of its 2030 schedule, and IGL’s “3×3” feedstock flexibility (grain, molasses and imported alcohol) lets it optimize cost and even divert in-house ethanol into its chemicals as an intermediate.
With policy now debating blending beyond 20% and flexi-fuel vehicles, there is a real, if policy-dependent, growth runway.
Net net, bundled with spirits, this makes ISL a ₹2,801 crore-revenue company – 67% of the group’s net revenue. This segment (Spirits + Ethanol) together carry both the best margins and the fastest growth.
#3 Chemicals (BSPC) → retained in India Glycols.
In FY26, the chemicals segment did ₹1,203 crore of revenue at an 11.7% EBIT margin, up 239 basis points even as revenue dipped, as management shifted toward higher-value performance chemicals.
IGL is the largest maker of bio-based (green) glycols, runs a growing performance-chemicals portfolio – oilfield chemicals, carbon-smart materials, India’s first green bio-based amine, with L’Oréal as a launch customer and earns a steady stream from its Clariant joint venture, into which it sells ethylene oxide.
It is a decent, stable, mid-teens-margin chemicals business. It is simply not the growth story.
#4 Ennature Biopharma → Ennature Bio Pharma (the small stub).
The smallest piece: ₹208 crore of revenue in FY26 at a 3.5% margin, under pressure from competition and input costs, though Q4 showed a sharp recovery.
It is the market leader in Thiocolchicoside API (muscle relaxant), makes nutraceuticals and nicotine, and, post-demerger, picks up a Guar Gum sub-segment that CARE Ratings expects to add ₹65–70 crore of revenue at 25–30% margins, a small but high-quality kicker.
Its EBIT margin has compressed from roughly 25% in FY23 to about 3.5% in FY26, and the cause is price, not volume. India Glycols is the market leader in Thiocolchicoside, a muscle relaxant API, and a meaningful player in nicotine, so when a competitor commissioned a new plant in exactly these products, realisations fell.
In a commodity like API, the leader’s margin is the first to give way. Input cost inflation and a soft global demand environment for nutraceuticals did the rest. The result is a business whose top line has held its ground even as its profitability has quietly drained away, which is why the segment matters far less to the story than the businesses leaving in IGL Spirits
Debt down, cash flow turning
There is a second reason the timing is interesting, and it has nothing to do with the demerger mechanics. India Glycols is in the middle of a balance-sheet inflection.
In November 2025 the company raised ₹467 crore through a preferential issue to promoters and associates, and it used the bulk of it, together with internal cash to prepay roughly ₹804 crore of debt in a single quarter.
Total debt (including LC acceptances) fell to about ₹1,863 crore by December 2025 and ₹1,793 crore by January 2026 & ₹1528 crore by March 2026. This should further reduce in Q1FY27, however, quarterly numbers are yet to be released.
CARE expects net-debt-to-PBILDT to fall from 4.31x in FY25 into a 2.5–3.0x range, and adjusted gearing toward ~0.7x by year-end.
Crucially, the capital-spending cycle that drove much of that debt is largely over. Roughly ₹1,300 crore of capex across FY24 and FY25 built out grain-based distillery capacity and the new specialties unit, and management says no major capex is planned in the medium term.
The trajectory from here is friendlier: gross cash accruals of ₹440–550 crore expected against scheduled repayments of ₹337 crore (FY26) and ₹277 crore (FY27).
You can already see it in the numbers. Finance costs in the March 2026 quarter fell to ₹26 crore from ₹45 crore a year earlier and interest cover and ROCE have both improved.
Is there value? A sum-of-the-parts
DISCLAIMER: What follows is an illustrative if-then framework using peer multiples and trailing numbers. It is not a target price and not a recommendation and not a prediction. It is an if-then exercise to help readers think about how the market might value these two businesses once they trade independently.
The idea of a sum-of-the-parts is simple.
Today the market values India Glycols as one blended entity, at roughly ₹6,600 crore, on about 22x earnings and 13x EV/EBITDA. After the demerger, three businesses will trade on three different multiples, chosen by three different sets of investors. The question is whether the parts, valued properly, add up to more than the blended whole.
Basis comparison with peers and assigning a base case EV/EBITDA multiples for each segment we have come up with the following base case estimates:
Base b
Base case estimates indicate there is little value left on the table. However, since these are estimates it’s best to outline what ‘lever’ might drive an upward or downward change. There are:
- The potable spirits segment is moving “up the value chain” with a higher percentage of IMFL in the mix. Although, these are not the company’s own brands but rather bottling, market, distribution arrangements with bigger brands like Amrut and Bacardi. A higher share of IMFL can improve margins and may lead to a higher multiple from base case 13x.
- In the IGL spirits business, you also have Ethanol. If the ethanol blending program does not ramp up and grain (maize) prices go up, a significant part of this business’s EBITDA might contract sharply.
- Thirdly, we’re not as confident about the multiples assigned to the BSPC segment. A different multiple could alter the overall valuation math.
The bottom line is that India Glycols has transformed over the past few years. It has increased sales, EBIT margins in key segments and increased ROCE. However, according to our base case estimates the current market capitalization does not leave significant upside leading up to the separate listing.
Post listing we could witness opportunities if there is significant sell-off in the less desired divisions.
Notes, disclaimer and disclosure
Data note: Financial figures are drawn from India Glycols’ investor presentations and earnings-call transcripts for Q4 FY25 through Q4 FY26, the CARE Ratings (CareEdge) press release dated 6 March 2026, and the demerger scheme documents; NCLT status is from exchange-disclosure news as of July 2026; market data is from Screener.in. Segment EBIT is computed from reported segment revenue and margins and reconciles to reported figures within rounding. Market cap, share price and peer multiples move daily and should be refreshed at publication. Note the EPS discontinuity across FY26 caused by the ₹10→₹5 face-value sub-division (record date 12 August 2025).
Disclaimer: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Rahul Rao has been investing since 2014. He has helped conduct financial literacy programs for over 1,50,000 investors. He helped start a family office for a 50-year-old conglomerate and worked at an AIF, focusing on small and mid-cap opportunities. He evaluates stocks using an evidence-based, first-principles approach as opposed to comforting narratives.
Disclosure: The writer or his dependents do NOT hold shares in the securities discussed in this article. The content and interpretation of data are solely the personal views of the author.