Stalwart Advisors

De-merger Price Adjustment

We had added HSIL to model portfolio with a 7% allocation at a price of Rs 332 a share on 21st June 2018.

On 19th August 2019, HSIL went ex-demerger with the demerger of consumer entity Somany Home Innovation Limited (SHIL). We will get one share of SHIL for every share held in HSIL post which it shall get listed, this may take about two months.

For internal accounting, we have split the cost between the two entities in the following manner:

HSIL continues to be on buy list. If you don't have a position, you may buy/add HSIL upto 2% of portfolio at current price whereas SHIL can be added post the listing, provided we retain it on buy list.

Note: This split is only for internal reference and should not be used for taxation purpose. The company will share cost split ratio based on prescribed income tax rules and we will release a separate update for that.


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Exact weightage will depend on each subscriber’s risk appetite & comfort. However, as a thumb rule, any position size under 3% is little insignificant to move returns at portfolio level whereas beyond 10% it gets riskier from a concentration standpoint. Accordingly, low could indicate 3-4% weightage, medium 5-7% and high 8-10%.
Structural are those portfolio businesses where earnings are relatively stable (less volatility) and further are expected to rise in a steady fashion. Cyclicals are businesses which experience periods of upcycle followed by downcycle and have large variation in their reported earnings based on industry demand and supply. The mix between the two depends on available opportunities and respective valuation of the two pockets.