Godrej Group shows how to succeed at succession planning in family business without any bad blood

The realignment of shareholding within the Godrej Group has now led to Adi Godrej and his younger brother Nadir getting the newly formed Godrej Industries Group. Under this will be housed five listed companies – Godrej Industries, Godrej Properties, Godrej Consumer Products, Godrej Agrovet and Astec Lifesciences. Nadir Godrej will be the Chairperson. 

The other set of businesses will come under Godrej Enterprises Group, which will have the unlisted Godrej & Boyce, its affiliates and a vast land bank in central Mumbai. That has gone to Jamshed Godrej and Smita Godrej Crishna, both cousins of Adi and Nadir Godrej. While Jamshyd Godrej will be the Chairperson, Nyrika Holkar, his niece and Smita Godrej’s daughter will be the Executive Director.

A disclosure made to the stock exchanges on 30 April has outlined the details on both a family settlement agreement and a brand and non-compete agreement. “The third and fourth generations of the family branches have diverse interests, and varying perceptions as to, amongst others, the strategic direction, growth and governance of the Godrej Group entities. 

The family branches are desirous of ensuring harmony in the future amongst the succeeding generations of the Godrej family,” it states. It goes on to say that to preserve mutual respect, goodwill, amity and harmony and to manage diverse expectations and strategic directions desired by each family branch, “each branch head acting for himself and on behalf of the other members of his concerned family branch, has agreed upon a family settlement arrangement by way of the family settlement agreement amongst the family branches.” 

On the brand and non-compete agreements entered into by the family groups, it pertains to the rights for adoption, use, ownership and registration of the Godrej brand, as well as accepting certain non-compete obligations. “This shall ensure stability and continuity of the businesses carried out by each family branch and maintain harmony amongst the family groups.”

One of the big areas of interest is the land bank of over 3,000 acres in Vikhroli in central Mumbai along the eastern express highway. A joint press release put out by “Godrej & Boyce, the owner-developer and Godrej Properties, the development manager” said that the two companies will continue their Memorandums of Understanding “executed from time to time, for development of land in Vikhroli owned by Godrej & Boyce, as when it is desirous of developing the said land.

Godrej Construction, a business of Godrej & Boyce, has designed and built four phases of Godrej Platinum, a residential project with a total constructed area of one million square feet, which has been marketed by Godrej Properties. Earlier this year, a new project named Godrej Vistas was successfully launched under this arrangement.

According to Ashish Kumar Singh, Managing Partner at law firm Capstone Legal, the strength of the Godrej brand is key and how it is used across diverse businesses. Specifically, on the family settlement agreement, he says is a good example of how family businesses can address issues amicably without any bad blood. “It is a clear message to the shareholders of all the companies (across the group) on the levels of transparency. Ever since a potential settlement was spoken of, the stock price of the listed companies has actually taken off, which is an indication of the group’s brand value and its image.”

While Nadir Godrej will be the Chairperson of Godrej Industries Group (GIG), the statement said that Pirojsha Godrej, Adi Godrej’s son and currently Executive Chairperson, Godrej Properties, will take charge as GIG’s Executive Vice Chairperson of GIG from Nadir Godrej in August 2026. “What has been done is a far-sighted decision keeping the next couple of generations in mind and ensuring it is business as usual. Family settlements are often contentious and this is an instance of how to go about it keeping everyone happy,” says Singh.