Godrej Family Settlement: Here’s how the listed entities stack up

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Godrej Properties Ltd. and Godrej Industries Ltd. declined 3% each on Tuesday, while those of Godrej Agrovet, Godrej Consumer Products and Astec Lifesciences advanced post the announcement of the 127-year old group’s settlement on Tuesday.

Adi Godrej and his brother Nadir Godrej have retained control over Godrej Industries and its listed entities, while cousins Jamshyd and Smita will have control of the unlisted Godrej & Boyce along with its affiliates and a substantial land bank, including a prime property in Mumbai.

Here’s how the listed entities playout post the settlement:

Godrej Industries is the holding company of the Godrej Group. As of Tuesday’s close, shares traded at a 54% holding company discount.

A Holding Company Discount means the holding company’s market capitalisation is less than the sum of the investments it holds.

Godrej Industries holds a 24% stake in Godrej Consumer Products worth ₹30,000 crore, a 43% stake in Godrej Properties which is worth ₹31,600 crore and a 65% stake in Godrej Agrovet, which is worth ₹7,000 crore.

Currently, Godrej industries has a market capitalisation of around ₹31,000 crore.

Astec Lifesciences: This is where Godrej Agrovet owns a 64% stake and acts as the company’s promoter. In turn, Godrej Industries owns a 64% stake in Godrej Agrovet, which commands a market capitalisation of ₹2,500 crore. At current price, Godrej Industries’ stake in Godrej Agrovet is valued at ₹1,000 crore.

The Adi Godrej faction, led by Nadir Godrej announced an open offer to acquire a 26% stake in Astec Life at ₹1,069 per share, which is a 17% discount to Astec’s closing price on Tuesday.

While the other faction led by Jamshyd Godrej will have control over Godrej & Boyce and the company’s land parcel at Vikhroli, Godrej Properties will be the development manager of the same.

Brokerage firm CLSA said that the announcement lends clarity on the Vikhroli land and also rules out any potential option value to Godrej Properties that could have emerged.

CLSA has maintained its “Sell” rating on Godrej Properties with a price target of ₹2,110, citing rich valuations.

Shares of Astec Life had opened higher but have given up all the gains to currently trade at ₹1,292, a gain of 0.8%.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow