An insight into HoldCo Discount

Authored by: CA Punit Khandelwal, CA Sunit Khandelwal & Prof. Divya Aggarwal

Assisted by: CA Allen Vincent and Anurag Garg


We are pleased to release the second edition of Incwert’s holding company discount (“HoldCo Discount”) study 2021, based on the analysis of select listed holding companies across major sectors in India.

The study could be of importance to the valuation professionals when dealing with the quantum of discount to be applied for valuing the holding of a minority shareholder in an entity that is essentially an investment vehicle. The empirical evidence based on market data may also be a reference for addressing the holdings in a private conglomerate.

A holding company or conglomerate discount occurs when a holding company’s market capitalisation is less than the sum of the investments and other net assets that it holds. The level of discount is the difference between the aggregate value of each investment in the conglomerate and its market capitalisation.

The results indicate that the discounts, influenced by several factors – industry, sector, timing within the economic cycle, multi-layer subsidiaries, reporting complexity and market capitalisation, vary across time and sectors.

We hope you find the results of our study of interest and value.