Billion-Dollar Business Split: Godrej Heirs Resolve Differences Peacefully

The Godrej family, which is at the helm of a $5.7 billion sprawling empire, has reached an amicable agreement to divide the group into two, a rare occurrence in the increasingly contentious world of family business splits.

Adi Godrej — the head of the family — and his brother Nadir Godrej will retain control of the five listed companies of the Godrej Group with interests in consumer goods, real estate, agriculture, chemicals, and gourmet retail, according to a stock exchange filing late on Tuesday. The cousins, Jamshyd and Smita, will receive the unlisted Godrej & Boyce Mfg. Co. along with its affiliates and a vast land bank. Nyrika Holkar, Pirojsha Godrej has risen as the key next generation leaders of the two businesses.

In total, 26 members are involved in the family settlement agreement. According to a statement issued by the group, both groups will continue to utilise the 'Godrej' brand and are "committed to strengthening their shared heritage". There is no requirement to pay royalties for utilising the brand.

The division of the 127-year-old conglomerate was agreed upon to honour the differing viewpoints within the family over business strategies, especially among the younger generation. There have been no apparent undercurrents despite the differences, according to a person with knowledge of the matter who spoke on the condition of anonymity.

The two factions of the Godrej family have historically owned shares in various companies within the group and served on each other's boards. However, to facilitate a clean separation, they have decided to transfer their equity interests after resigning from their respective board positions.

Some family members may still own a small number of shares in the other family's companies, but they will not have special privileges as owners.

The settlement also makes it clear that shares held by either group in any of the companies will not be transferred to competitors except with the prior permission of the other group.

The Godrej Industries Group—which includes the listed entities Godrej Industries Ltd., Godrej Consumer Products Ltd., Godrej Properties Ltd., Godrej Agrovet Ltd., and Astec Lifesciences Ltd.—will be led by Nadir Godrej as chairperson alongside his brother Adi and their immediate families.

The group has also announced an open offer to acquire shares held by the public shareholders of Astec Lifesciences as a result of the settlement.

Pirojsha Godrej, the son of Adi Godrej, has been appointed as the executive vice chairperson of the group. He is scheduled to assume the role of chairperson from Nadir Godrej in August 2026.

The five listed companies are collectively valued at Rs 2.4 lakh crore.

On the other hand, the Godrej Enterprises Group comprises Godrej & Boyce, along with its associated companies that operate diverse businesses including appliances, aerospace, aviation, defence, energy, security, construction, healthcare, furniture, IT, and infrastructure.

This arm will be led by Jamshyd Godrej, as chairperson and managing director, alongside his niece Nyrika Holkar as the executive director, and their immediate families, as per the family settlement agreement.

Jamshyd and Smita will also retain land parcels held by Godrej & Boyce, including over 3,400 acres in Vikhroli, a suburb of Mumbai, which remain the family's largest asset.

The privately held Godrej & Boyce reported revenue of Rs 14,796 crore in the financial year ending March 2023, achieving a net profit of Rs 117 crore. The company holds a 7.3% stake in Godrej Consumer and a 3.8% stake in Godrej Properties, with a combined valuation of around Rs 9,000 crore. Smita and Jamshyd would transfer their shares to Adi and Nadir and similarly the latter will divest their stakes in Godrej & Boyce to the former.

The family's shareholding in various entities of the Godrej Group will be realigned once relevant regulatory approvals have been obtained.

"With this forward-looking 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.

The locks-to-land development group has also entered into a six-year non-compete agreement. The two family groups have mutually agreed on non-compete provisions to protect their current and exclusive businesses for a period of six years from the 'effective date'.

Once this non-compete period has ended, either family group is permitted to engage in the exclusive business operations of the other family group, but without the use of the 'Godrej' brand in any form, including in their corporate or entity names, as stated in the agreement.

The iconic business group began as a lock company and later produced the world's first vegetable oil soap under the brand name Chaabi (meaning "the key" in Hindi).

Over the years, Adi Godrej has passed the baton to his three children to oversee various group businesses. His son Pirojsha leads Godrej Properties, the real estate arm of the group, serving as its chairman.

The eldest daughter, Tanya Dubash, holds the position of executive director and chief brand officer for the group, while the youngest, Nisaba Godrej, has been leading Godrej Consumer Products Ltd., the largest company in the group, as its chairperson since 2017.

According to the company, the separation will help maximise strategic direction, focus, agility, and accelerate the process of creating long-term value for shareholders and all other stakeholders.

"Godrej was founded in 1897 to help build economic independence for India," Nadir Godrej said. "This deep purpose of innovating for a 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 73-year-old added.

Cyril Amarchand Mangaldas acted as the legal counsel from the Adi Godrej side, while Jamshyd and family were represented by AZB & Partners.