Multibagger stock hits upper circuit after demerger announcement

The scheme does not include cash consideration and the existing shareholders will receive two fully paid-up equity shares of Each of the 10 resulting company (Digidrive Distributors Ltd.), one equity share each, is to be credited as fully paid-up 10 each demerger company (Saregama).

“We highlight that the demerger involves only the digital distribution arm and the Caravan business remains with the Saregama residual unit. As per our understanding, the distribution entity enjoys a non-exclusive right to sell Caravan on the e-commerce platform, which will continue to be the case,” domestic brokerage and research firm ICICI Securities said in a note.

The share price of Saregama has risen almost 18.7 times in the last five years. The brokerage has retained its hold rating multibagger stock with a target price of 4,890 per share. Shares of Saregama have gained more than 202% in the one-year period, however, are down about 11% so far in 2022.

The note said, “The dissolution of non-core activity, particularly publishing, is a significant positive prospect driving management’s focused approach on the music core business. We expect digital monetization to deliver continued growth.” “

In addition, the growth trajectory in music licensing, which management envisages to grow 25-30%+ over the medium term, along with new content exposure and financial re-opening in Caravan and expansion in the movies and web series segment The recovery could act as the major trigger for future price performance, according to ICICI Securities.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.