New Delhi, Aug. 21 -- Some corporate breakups don't hurt-they pay. These three demergers turned focused, independent businesses and went on to deliver multibagger returns after listing.

Conglomerates often house diverse businesses under one roof-Reliance with Jio and Retail, or Tata Motors with commercial vehicles and passenger vehicles. But this diversity makes it difficult to sharpen focus. On top of that, markets typically apply a "holding company discount," valuing a conglomerate lower than the sum of its parts.

To unlock hidden value, companies frequently spin off or demerge units. The result? Sharper management focus, cleaner capital allocation, and the removal of the discount-all of which can boost returns.

Post-demerger, if the...