Godrej Industries, Godrej Consumer Products, Godrej Properties, and other group stocks in focus after split

Godrej Group shares traded mixed after an agreement was reached on the division of Godrej Group. As per the agreement reached late Tuesday, the 127-year-old group will be split into two entities - one led by Adi Godrej and his brother Nadir and the other by their cousins Jamshyd and Smita.

As of 10:15 a.m., Godrej Properties and Godrej Industries shares were down over 3 per cent. Meanwhile, Godrej Agrovet shares were up over 2 per cent, Godrej Consumer Products shares were up over 1 per cent,  and Astec Lifesciences were up over half a per cent. 

The former will lead Godrej Industries Group, comprising listed companies, including Godrej Industries Ltd, Godrej Consumer Products Ltd, Godrej Properties Ltd, Godrej Agrovet Ltd, and Astec Lifesciences Ltd. 75-year-old Jamshyd Godrej will lead Godrej Enterprises, which comprises Godrej & Boyce Manufacturing Co. 

Also read: Godrej family reveals plan to realign shareholding in group firms; here are the details

With a presence in many sectors like aerospace, aviation, defence, energy, construction, IT, and software while his niece Nyrika Holkar will be the executive director.

While both groups will continue to use the Godrej brand name, the two have signed a six-year non-compete pact that will restrict them from entering each other's domain. 

After the expiry of the non-compete period, they can venture into other's domain but can not use the Godrej name for that, according to sources and the regulatory filing.

Sources said the split has been done through the transfer of shares and not value.

Adi and Nadir Godrej will divest their stakes in Godrej & Boyce to the other branch. Jamshyd Godrej and his side of the family will transfer interests in Godrej Consumer Products (GCPL) and Godrej Properties to their cousins through a family arrangement.

Real estate worth thousands of crores of rupees, mostly in prime Mumbai suburbs, will remain under Godrej & Boyce (G&B), and a separate agreement will be worked out to govern the ownership rights.

Also read: Godrej split news: 127-year-old Godrej group splits, to continue joint business for Vikhroli project in Mumbai

Brokerage view 

CLSA maintained a 'sell' on Godrej Properties and gave a target of Rs  2,100 apiece. The brokerage continued with a sell rating on rich valuation.

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