Godrej group could see birth of another property developer

livemint.com:

BENGALURU : One branch of the Godrej family could enter property development to become a future rival to the other, under the terms of their family agreement, though some riders in the treaty may limit its growth in the short term. For long, Godrej & Boyce Mfg Co. Ltd owned the group's land assets, while Godrej Properties Ltd did the property development.

Following the division, Nyrika Holkar, whose family branch will own Godrej & Boyce, is free to build a real estate business, potentially becoming a rival to Godrej Properties, led by her older cousin Pirojsha Adi Godrej. Under the family agreement disclosed to the exchanges on Tuesday night, Jamshyd Godrej-owned Godrej & Boyce Manufacturing Co. Ltd cannot buy new land for six years under a non-compete pact, which will take effect when the Competition Commission of India clears it.

Once the non-compete period is over, Godrej & Boyce can buy land, but not under Godrej brand name, according to executives familiar with the settlement process. Nyrika, 42, is the daughter of Smita and Vijay Crishna and niece of Jamshyd Godrej, chairman of Godrej & Boyce. Godrej & Boyce retains the right to list its real estate business, although the group has no immediate plan to do so, according to an executive briefed on the development.

It is unclear how much land Godrej & Boyce owns across the country, but the Group is estimated to own about 3,000 acres in Vikhroli, an eastern suburb of Mumbai. Mint could not ascertain the commercial and financial arrangement between Godrej & Boyce and Godrej Properties, including if any loans were made by Godrej & Boyce to Godrej Properties. Spokespersons for both Godrej groups declined to comment.