The Godrej family is amicably splitting the 127-year-old conglomerate into two groups

The multi-billion dollar Godrej family has decided to amicably demerge the Godrej group, which spans from real estate to consumer products, into two groups by disentangling the mutual interests of the family members over group companies with a division of businesses and assets between patriarch Adi Godrej and his cousin Jamshyd Godrej.

Statements sent to the stock exchanges by the group’s listed companies 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 on a family settlement agreement ( FSA) and a trademark and non-compete agreement has been entered into between some members of the Godrej family.

Structural reorganization

According to the FSA, the Godrej Industries Group (GIG), which includes 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 chairman and will be controlled by Adi Godrej, Nadir Godrej and their immediate families. Adi Godrej’s son, Pirojsha Godrej, will become executive vice-chairman of GIG and will succeed Nadir Godrej as chairman in August 2026.

On the other hand, the Godrej Enterprises Group (GEG) of companies will include privately held Godrej & Boyce Manufacturing Company, Godrej Holdings Private Limited and Godrej Infotech Limited and all their respective subsidiaries and joint ventures, and RKNE Enterprises. The GEG, which has a presence across multiple sectors including aerospace, aviation, defense, IT, software and infrastructure solutions, will now be controlled by Jamshyd Godrej, Chairman and Managing Director, Nyrika Holkar, Executive Director, and their immediate families.

According to Tuesday’s closing prices, the Godrej family’s stake is worth Rs 1.53 trillion in the five listed companies, which have a combined market capitalization of Rs 2.44 trillion.

According to the statements, the family said the realignment was done in a respectful and conscious manner to maintain harmony and to better align the ownership in recognition of the different views of the Godrej family members. “This will help maximize strategic direction, focus and flexibility and 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 forward-looking family agreement in place, we can further drive our growth ambitions with less complexity 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.” said Jamshyd Godrej.

In the statements to the stock exchanges, Nadir Godrej said: “Godrej was founded in 1897 to help build India’s economic independence. This profound purpose of innovating for good – the values ​​of trust and respect and the belief in trusteeship and making the communities in which the companies operate stronger and better – are still the foundation of who we are 127 years later. We look forward to building on this legacy with focus and flexibility.”

The family said in the statement that members of the Adi B Godrej (ABG) family and the Nadir B Godrej (NBG) family will not be directly or indirectly involved in the management and activities of entities under the control or management of the Jamshyd Godrej (JNG) family and his sister Smita Crisjna-Godrej (SVC) family. Likewise, the members of the JNG and SVC families will not be directly or indirectly involved in the governance and activities of entities under the control or management of the ABG and NBG families.

Brand management

As far as the use of the brand ‘Godrej’ is concerned, the ABG family and the NBG family will have the exclusive right to adopt, use, own and register the name and brand ‘Godrej’ in businesses such as fast moving consumer goods (including cosmetics, household and cleaning products). supplies, sanitary care, toiletries), food and beverages, dairy products and services, financial services, pharmaceuticals, pharmacy, diagnostics, sexual well-being, agriculture and agriculture-related services, fertilizers, chemicals, oils and fats, among others the limited scope that has been specifically agreed.

The JNG and SVC family, on the other hand, will have the exclusive right to adopt, use, own and register the name and brand ‘Godrej’ in sectors such as aerospace, aerospace, defense, furniture, durable goods, heavy technology, locks. and architectural hardware, EPC services, building materials, home and office automation services, residential and commercial interior design services, medical equipment, software solutions, IT/ITeS, machinery, energy, electric mobility companies, vending machines, security products and solutions, intra-logistics, transmission systems, among others.

In addition, the ABG family and NBG will have the exclusive right to adopt, use, own and register the name and brand ‘Godrej’ in connection with the development, marketing of real estate projects and real estate services relating to the sale and/or or purchase of real estate projects, and leasing or licensing to third parties. The JNG family and SVC, on the other hand, will have the exclusive right to adopt, use, own and register the name ‘Godrej’ and the brand ‘Godrej’ for the real estate development activities and the leasing/licensing activities carried out in respect of ground. plots (including the land in Vikhroli) owned or leased on a long-term basis from 1 January 2024 to the JNG and/or SVC Family or a real estate asset class developed on the existing G&B plots of land by the JNG and/or SVC Family, directly or indirectly through their subsidiaries.

‘Non-competition clause

The two families have also agreed to a six-year non-compete agreement. The Family Groups have also agreed to certain non-competition protections for their existing and exclusive businesses, which will apply for six years from the “effective date.” After the non-competition period, a family group can take over the exclusive business of the other Family Group, without using the ‘Godrej’ brand (including in the name of their business/entity group), the statement said.

The attempt of the settlement was to minimize cross-shareholding between the two families within the group companies. While some small cross-shareholdings may continue to exist with family members of the other group, the latter will be treated like any other (public) shareholders and not classified as promoters. Shares of the Company held by members of the other group on or after the Effective Date may not be transferred to competitor(s) identified under the FSA except with the prior approval of the heads of department of the ABG family and the NBG family or through a non-negotiated sale on the market.

Godrej & Boyce land

The assets of Godrej & Boyce Manufacturing Company include a sprawling 3,400 hectares in Vikhroli (a suburb of Mumbai, located on the northeast side of the city). Of this, about 1,000 hectares can be developed and another 1,750 hectares have mangroves and will not be developed due to environmental concerns, Adi Godrej said in 2011. Another 300 hectares of land has been degraded. An acre of land costs between Rs 70 crore and Rs 80 crore in Vikhroli, a real estate analyst said. The plot of land was acquired by the Godrej family from the trustee of the Bombay High Court in the early 1940s. 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 part of the Godrej & Boyce land along with other projects in Mumbai, including the redevelopment of a film studio of late actor Raj Kapoor, now owned by the Godrej family. On January 24 this year, Jamshyd Godrej had resigned as non-executive director of Godrej Properties after reaching the age of 75, according to 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) – had earlier settled share in all group companies and assets.

Generational transition

The Godrej group was founded in 1897 by Ardeshir Godrej, who started his journey by selling locks along with his brother Pirojsha. Although Ardeshir Godrej had no children, Pirojsha’s sons Burjor, Sohrab and Naval led the group. The group is now run by Burjor’s sons Adi, and Nadir and Naval’s son, Jamshyd.