Godrej & Boyce to retain rights over 3,400 acre land bank
Agreement reached late Tuesday, the 127-year-old group will be split into 2 entities
image for illustrative purpose
JamshydNaoroji Godrej and his sister SmitaCrishna Godrej-controlled Godrej & Boyce will hold the exclusive construction rights over a vast land bank, including a prime 3,000 acre-property in Mumbai, they got as part of the family agreement that split the Godrej empire, as per sources and regulatory filing.
According to 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. 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. with 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 cannot 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. Sources said G&B will own the sole construction right over all the land bank, while Godrej Properties of the other faction will have the right to market. Godrej Properties will have no construction rights.
It owns 3,400 acres of land in Mumbai, including a 3,000-acre parcel in Vikhroli, Mumbai. The Vikhroli land, by some estimates, has a development potential of over Rs 1 lakh crore. It can develop 1,000 acres, while about 1,750 acres are covered with mangroves and is the destination of rare plants and birds. About 300 acres of land have already been encroached upon.
The Vikhroli property was bought by the group's co-founder Pirojsha at a public auction from the Bombay High Court receiver in 1941-42. It was previously owned by a Parsi merchant FramjeeBanaji, who bought it from the East India Company in the 1830s. Lawyer-turned-serial entrepreneur Ardeshir Godrej and his brother in 1897 succeeded at locksmithing after failed ventures into hand-fashioned medical devices. Ardeshir did not have any children, and so the group was inherited by his younger brother Pirojsha. Pirojsha had four children - Sohrab, Dosa, Burjor and Naval.
Over the years, the helm of the group came to the children of Burjor (Adi and Nadir) and Naval (Jamshyd and Smita), as Sohrab had no children, while Dosa had one child Rishad, who had no children. To enable the split, the two sides quit the boards of companies in rival camps.
