It seems that it has resurfaced again in the 21st century in a morphed version that I would like to call as "financial alchemy" and define it as the practice of striving to discover/unlocking of stupendous financial value from some very basic business elements.
This time, the alchemists seem to thrive in emerging countries like China, Russia, and India though the most ardent practitioners seem to be converging on India, with their ardour reaching a state of frenzy in the recent weeks.
The alchemists of the Middle Ages tried achieving results experimenting with newer and fancier combination of various base elements and compounds. The modern alchemists seem to have found their "philosopher's stone" (catalyst) through "fission" or as they now call it unlocking value through demerger of just about every element that till recently constituted the whole business itself.
Reliance has been credited with many firsts in India. They can also take the credit for the discovery of this new "business fission" model wherein they first split the business largely into two entities that represented a fair split of assets between two members of the Ambani family.
Each side then further proceeded to announce or put in effect an amoeba-like proliferation of new business units derived from demergers of hitherto internally embedded operating businesses.
The financial performance of these new businesses -- at least in the financial markets -- has truly been awe-inspiring and has put the two now independent promoters well on top of the list of the world's richest. Many others have taken their cue from the same, and have already achieved very similar results, though obviously not on the same scale as Reliance has managed.
On a careful analysis of these fission-generated particles (new business units), some of the more distinct ones seem to be land and other real estate that currently houses their running or defunct business units (giving rise to terms like "land bank" and "development rights"), energy (whether captive power units for internal consumption or a presence in any part of the overall energy production and distribution value chain in any form), logistics (mostly internal capability for moving raw material and processed goods from source to conversion facilities to the customers), and financial /capital services (mostly acquired through managing own treasury portfolios else own corporate debt and public/private equity deals).
In the not so distant past, another "business unit" was the internal capability to deploy technology but in the current context, infotech seems to be of little interest. Once this fission has been completed (i.e. demergers taken place or even promised to take place), almost overnight the business acquires the sheen of gold and gets re-rated immediately.
Textile companies become real estate companies, retail companies become real estate and financial powerhouses, construction companies become infrastructure companies with power/energy becoming the hottest reincarnation, and mere transport companies become logistics superstars.
Of course, currently it is not even necessary to be present in any of the new businesses in any form. Merely announcing an intention to get into a promising new sector (and just about every sector barring export-oriented businesses can be deemed at promising in India these days with the endemic demand-supply gap in every facet of physical or social infrastructure, and the steady growth in domestic consumption) can see stock prices shooting through the roof, and billions (or tens of billons) dollars pouring in from local and global investors trying to get a piece of the action.
The days when holding companies held on to real, large, steadily growing and consistently profitable businesses (such as Tata Sons -- TCS) till it was appropriate to demerge and list are long gone. Whether this present-day alchemy can actually predictably and consistently continue to deliver what the generations of alchemists could not achieve in the Middle Ages is something wait and watch out for.
In the interim, perhaps yesterday's stars like Infosys should consider de-merging its internal guest house accommodation bank (it reportedly has over 15,000 rooms), its campuses' real estate, its on & offline hiring expertise, its internal catering experience, and its formidable treasury function assets into independent companies, get re-rated and become sizzling hot once again. And I should try to convince my wife that we have successfully run a household for 25 years and therefore we should unlock some value by announcing plans to get into food & grocery, real estate facilities management, financial advisory, and entertainment and leisure businesses!