 "Godrej family amicably splits 127-year-old conglomerate into two groups")
The multi-billion dollar Godrej family has decided to amicably split the Godrej Group, which spans from real estate to consumer products, into two groups by untangling the cross-holdings held by the family members across group companies with a division of businesses and assets between the patriarch Adi Godrej and his cousin Jamshyd Godrej.
Statements sent by the group’s listed companies to exchanges late on Tuesday, said the promoters – Adi Godrej, Nadir Godrej, Jamshyd Godrej and Smita Godrej Crishna, heads of the respective family branches, have sent a joint letter about a family settlement agreement (FSA) and a brand & non-compete agreement having been entered into amongst some members of the Godrej family.
Structural reorganisation
According to the FSA, the Godrej Industries Group (GIG), which includes the listed companies, Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences as well as Innovia Multiventures Private Limited, Godrej Seeds and Genetics, and Anamudi Real Estates, along with their respective subsidiaries and joint ventures, will have Nadir Godrej as chairperson and will be controlled by Adi Godrej, Nadir Godrej, and their immediate families. Adi Godrej's son, Pirojsha Godrej will be the executive vice chairperson of GIG and will succeed Nadir Godrej as the chairperson in August 2026.
On the other hand, the Godrej Enterprises Group (GEG) of companies will include unlisted Godrej & Boyce Manufacturing Company, Godrej Holdings Private Limited and Godrej Infotech Limited and all of their respective subsidiaries and joint ventures, and RKNE Enterprises. The GEG, which has presence across multiple industries spanning aerospace, aviation, defence, IT, software, infrastructure solutions among others, will now be controlled by Jamshyd Godrej, chairperson and managing director, Nyrika Holkar, executive director, and their immediate families.
According to Tuesday’s closing prices, the value of Godrej family’s stake is worth Rs 1.53 trillion in the five listed companies, which have a combined market capitalisation of Rs 2.44 trillion.
More From This Section
As per the statements, the family said the realignment has been arrived at in a respectful and mindful way to maintain harmony and to better align ownership in acknowledgement of the differing visions of the Godrej family members. "This will help maximise strategic direction, focus, agility, and will accelerate the process of creating long-term value for shareholders and all other stakeholders," the company said in a statement.
“Since 1897, Godrej & Boyce has always been driven by the strong purpose of nation building. With this future-facing family agreement now in place, we can further drive our growth aspirations with fewer complexities and focus on leveraging our core strengths in high tech engineering and design-led innovation across our strong portfolio of strategic, consumer and emerging businesses,” Jamshyd Godrej said.
In the statements to stock exchanges, Nadir Godrej said, “Godrej was established in 1897 to help build economic independence for India. This deep purpose of innovating for cause – the values of trust and respect and the belief in trusteeship and making communities that the companies operate in stronger and better – continue to form the bedrock of who we are 127 years later. We look forward to building on this legacy with focus and agility.”
The family said, in the statement, members of the Adi B Godrej (ABG) family and Nadir B Godrej (NBG) family will not be directly or indirectly involved in the management and operations of entities under the control or management of the Jamshyd Godrej (JNG) family and his sister Smita Crishna-Godrej (SVC) family. Likewise, the members of the JNG family and SVC family will not be directly or indirectly involved in the management and operations of entities under the control or management of the ABG family and NBG family.
As a result of the realignment pursuant to the family settlement, the members of ABG family and NBG family will make an open offer to the public shareholders of Astec Lifesciences, an indirect subsidiary of Godrej Industries, in terms of regulations 3 and 4 read with regulation 5(1) of the Sebi's Substantial Acquisition of Shares and Takeovers (SAST) Regulations, due to indirect change in shareholding of Astec, the statement noted.
Brand management
On the usage of 'Godrej' brand, the ABG family and NBG family will have the exclusive right to adopt, use, own and register the 'Godrej' name and brand in businesses such as fast moving consumer goods (including cosmetics, domestic and cleaning supplies, sanitary care, toiletries), foods & beverages, dairy products & services, financial services, pharmaceuticals, pharmacy, diagnostics, sexual wellness, agriculture and agriculture related services, fertilisers, chemicals, oils & fats, among others., other than to the limited extent specifically agreed.
The JNG family and SVC family, on the other hand, will have the exclusive right to adopt, use, own and register the 'Godrej' name and brand in businesses such as space, aerospace, defence, furniture, durables, heavy engineering, locks and architectural hardware, EPC services, construction materials, home and office automation services, home and commercial interior design services, medical devices, software solutions, IT/ITeS, machines, energy, electric mobility business, vending machines, security products and solutions, intra-logistics, transmission systems, among others.
Additionally, the ABG and NBG family will have the exclusive right to adopt, use, own and register the 'Godrej' name and brand in connection with development, marketing of real estate projects and real estate services relating to sale and/or purchase, of real estate projects, and the business of leasing or licensing to third parties. The JNG and SVC family, on the other hand, will have the exclusive right to adopt, use, own and register the 'Godrej' name and brand for the real estate development business and the leasing / licensing business carried out in respect of any land parcels (including the land in Vikhroli) owned by, or leased as of January 1, 2024 on a long term basis, to the JNG and/or SVC Family or any real estate asset class developed over the existing G&B land parcels by the JNG and/or SVC Family, directly or indirectly through their affiliates.
This shall not restrict the ABG and NBG family, directly or indirectly, from using the Godrej brand when acting as development manager pursuant to an agreement with JNG and SVC family and / or their affiliates, of any land parcel owned by JNG and SVC family in Vikhroli, directly or indirectly, at any point of time. Both family groups can undertake businesses (using the 'Godrej' brand, along with a distinguishable group-level differentiators) which are not being undertaken by either of them as on January 1, 2024, and which have been agreed as being shared spaces for doing business. Some examples of shared businesses include medical services, hospitals, hospitality, education, among others. For the differentiator, the JNG and SVC family may, if it is a tagline, use "Godrej Enterprises Group" and ABG and NBG families may use "Godrej Industries Group", according to the statement.
'Non-compete' agreement
The two families have also agreed to a six-year non-compete agreement. The Family Groups have also agreed on certain non-compete protections for their existing and exclusive businesses, which shall apply for six years from the ‘effective date’. After the non-compete period, a family group can enter into the exclusive business of the other Family Group, without the use of the 'Godrej' brand (including in their corporate/ entity names), the statement said.
The effort of the settlement was to minimise cross-shareholdings between the two families across group companies. Though some small crossholdings may remain with family members of the other group, the latter will be treated as any other (public) shareholders and not be classified as promoters. Shares of the company held by members of the other group on or after the effective date are not permitted to be transferred to competitor(s) identified under the FSA, except either with the prior consent of branch heads of ABG family and NBG family or through a non-negotiated on-market sale.
Watch: Godrej group splits after 127 years, who gets what?
Godrej & Boyce land
Godrej & Boyce Manufacturing Company’s assets include a sprawling 3,400 acres in Vikhroli (a suburb of Mumbai located in the northeast side of the city). Of this, about 1,000 acres can be developed and another 1,750 acres has mangroves and will not be developed because of environmental concerns, Adi Godrej had said in 2011. Another 300 acres of land has been encroached upon. One acre of land is priced at Rs 70 crore to Rs 80 crore in Vikhroli, a real estate analyst said. The land parcel was acquired by the Godrej family in early 1940s from the Bombay High Court receiver. It was originally given by the East India Company to a Parsi merchant, Framjee Banaji, in the 1830s and came up for sale in 1941-42.
Godrej Properties, a listed entity, is developing some of the Godrej & Boyce land along with other projects across Mumbai, including the redevelopment of a film studio of the late actor Raj Kapoor, now owned by the Godrej family. On January 24th this year, Jamshyd Godrej had resigned as the non-executive director of Godrej Properties, having attained the age of 75 years, as per a statement on the BSE.
The five senior members of the Godrej family – Adi (82) and his brother Nadir (73), their cousin Jamshyd (75) and his sister Smita Crishna-Godrej (74) and another cousin Rishad (72) – earlier owned equal stakes in all the group’s companies and assets.
Generational transition
The Godrej group was set up by Ardeshir Godrej in 1897 who started his journey by selling locks along with his brother Pirojsha. While Ardeshir Godrej had no children, Pirojsha’s sons Burjor, Sohrab, and Naval managed the group. The group is now run by Burjor’s sons Adi, and Nadir and Naval’s son, Jamshyd.
The next generation of the family has also joined the group across various companies and are now in key leadership positions with Nisaba Godrej, daughter of Adi running Godrej Consumer Products and Pirojsha Godrej, Adi’s son, running Godrej Properties. Adi Godrej is currently the Chairman Emeritus of flagship Godrej Industries while Nadir is Chairman and Managing Director of Godrej Industries.