The realignment will be implemented after the relevant regulatory approvals have been obtained, after which the two companies will continue to use the Godrej brand.
Prima facie, analysts said the group arrived at an amicable agreement and there is a lot more clarity in the current restructuring now than what was speculated earlier.
“The restructuring takes off the confusion among investors and it is a welcome move. As time goes by, there will be more clarity among shareholders as the group has a complex structure that has legs in both the listed and unlisted market,” said Kranthi Bathini of Wealth Mills.
Under the new arrangement, Godrej Enterprises will be headed by 75-year-old Jamshyd Godrej as chairperson and managing director and his niece Nyrika Holkar as executive director.
Jamshyd Godrej was earlier serving as managing director and chairman of Godrej & Boyce, the privately held company, founded in 1897.Nadir Godrej, 73, will serve as chairperson of Godrej Industries, which operates through listed companies including Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences. GIG will be controlled by Nadir’s brother Adi Godrej and their immediate family.82-year-old Adi Godrej stepped down as chairman of Godrej Industries in August 2021, handing over the reign to his brother, Nadir Godrej.
Analysts further see no major immediate impact on the stock from an additional gains point of view for listed entities, but the overhang is gone.
“The development is already priced in by the market. It will be interesting to see who will develop the land parcel in Mumbai’s Vikhroli, which is owned by Godrej and Boynce, an unlisted entity. If it is developed by Godrej Properties, then it is a positive for the stock,” Bathini noted.
Godrej and Boyce and Godrej Properties announced that the two companies will continue their memoranda of understandings executed from time to time, for the development of land in Mumbai’s Vikhroli owned by the former, as and when it is desirous of developing the said land.
“The event is neutral and I see no material impact on the stock prices of listed entities. If anything, it might be slightly positive for listed entities. For investors holding the stock before the split announcement, they need not take a call based on the event. The results are awaited and can take a call only after the numbers are out,” Deepak Jasani of HDFC Securities.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
