How does MProfit compute XIRR for Demerged Companies?

In this tutorial, we will explain how MProfit computes XIRR for Demerged Companies. 

First, we executed buy and sell transactions in Reliance Industries without applying the demerger.

Step 2:  Click on Period and select All to Date from the drop-down list.

On March 16, 2020, we bought 100 shares for 10 rupees per share. On March 1, 2024, we sold 50 shares at a price of 200 rupees per share, without considering the demerger effect.

Upon hovering over the current value of XIRR, we get a percentage of 249. Let's move to another portfolio where the demerger effect has been applied.

Here in this portfolio, we can see both the buy and sell transactions, similar to the previous one.

We have made a demerger, which has resulted in a change in the average purchase price. Previously, it was ten rupees, but now it is nine point five three. If we click on the back button and hover over the current value, we will notice a difference in the XIRR.

This is how MProfit computes XIRR for Demerged Companies!