Murugappa Group’s talks for amicable split hit roadblock; family factions eye profit pie: Report

The plan to divide the Murugappa Group equally among the three family groups has reportedly hit a roadblock. In context, the plan has been going on for over two years. 

According to a report in the Economic Times, the Murugappa Chettiar family had been negotiating an amicable split of the business empire. The report added that they made over $9 billion in revenue in FY23.

However, the turnaround of CG Power’s fortunes within four years of its takeover by Murugappa company Tube Investments of India (TII) – a much-celebrated affair – has now become the bone of contention among the different family groups that comprise the promoter group. There has been a 15-fold jump in the share price of CG Power after TII’s buyout, the report added. 

Meanwhile, the group’s company Cholamandalam Investment and Finance Co, with Rs 1 lakh crore m-cap, has also delivered a standout performance. 

With value appreciation of a few of these group companies has led to serious differences between at least two of the three factions of the Murugappa family. They want to carve out three equal groups from the current corporate structure. 

The family had also made headlines last year over the settlement between family branch of the late MV Murugappan (including Valli Arunachalam and Vellachi Murugappan) on one side and the rest of the family on the other. The disputes started after the death of MV Murugappan. 

The Murugappa group – 124 years old – has close to 30 companies with businesses in sugar, fertilisers, abrasives, bicycles, polymers, financial services and engineering. 

One of the family factions is led by MA Arun Alagappan, along with second cousin Arunachalam Vellayan. The second faction is led by Vellayan Subbiah, and his second cousin Arun Murugappan. MM Murugappan and M Muthaiah Venkatachalam, both brothers, constitute the third group.

Coromandel International (formerly Coromandel Fertilisers), the second largest manufacturer and marketer of phosphatic fertiliser in India, is part of the first group.  All the three companies – CG Power, its parent TII and even Cholamandalam Finance – are steered by Vellayan Subbiah (second group), while Carborundum Universal Ltd, Cholamandalam MS General Insurance Co, Cholamandalam Financial Holdings and EID Parry are overseen by the third group.