Godrej Group in advanced talks to conclude split of businesses: Report

Industry executives said that the two arms of the Godrej family are likely to finalise the formal split of business verticals

The Godrej Group is reportedly in advanced stages of discussions to conclude the division of its diverse businesses, according to a report by The Economic Times (ET).

Industry executives informed ET that the two arms of the Godrej family — Godrej Industries & Associates, led by Adi Godrej and his brother Nadir, and Godrej & Boyce Manufacturing Company (G&B), involving cousins Jamshyd Godrej and Smitha Godrej Crishna — are likely to finalise the formal separation of business verticals. 

These verticals include consumer products, appliances, security solutions, agricultural products, and engineering. The family is currently negotiating specifics concerning the use of the Godrej brand name post-split, as well as land valuations held by G&B.

 

Officials indicated that the legal issues under review include the untangling of equity cross-holdings and the division of approximately 3,400 acres of prime land parcels currently held by G&B. One official stated that tax implications make it challenging to move the land parcels out of G&B. He added that some contentious issues related to the land needed resolution, almost necessitating arbitration.

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Officials further stated that the Godrej family amicably conducted talks, keeping in mind the best interests of all stakeholders involved, including consumers.

On the advisory front, Jamshyd Godrej is being counselled by investment banker Nimesh Kampani and corporate lawyer Zia Mody. Meanwhile, banker Uday Kotak and the legal firm Cyril Amarchand Mangaldas, led by Cyril Shroff, are advising the Adi Godrej side.

Pirojsha Godrej, son of Adi Godrej and chairman of Godrej Properties, has also been directly involved in the discussions. Officials stated that the primary aim of the split is to clarify the business structure to enhance shareholder value in the future.

The Pirojsha Godrej Foundation holds around 23 per cent of G&B, while five family branches under Adi Godrej, Nadir Godrej, Jamshyd Godrej, Smita Crishna, and Rishad Godrej hold 15.3 per cent each in G&B. The foundation invests in ventures focusing on the environment, health, and education sectors.

The Godrej Group comprises five listed companies: Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet, and Astec LifeSciences. As of the last trading day in September, these firms collectively had a market capitalisation of Rs 1.76 trillion. The companies registered nearly Rs 42,172 crore in revenue and Rs 4,065 crore in profits for the financial year 2022-23 (FY23).