Murugappa plan to split Group into 3 hits a bump
Murugappa Group equally among three family groups that’s been over two years in the making has got stuck, said people with knowledge of the matter. The Murugappa Chettiar family had been negotiating an amicable split of the diversified business empire with over $9 billion in revenue in FY23 after five generations of working together over more than a century, they said.
The much-celebrated turnaround of CG Power within four years of its takeover by group company Tube Investments of India (TII) has become a key bone of contention among different family groups that make up the promoter group.
Shares of four Murugappa group companies, including Wendt India and Shanti Gears, yielded over a 50% return in CY23. But it’s the meteoric 15-fold jump in the share price of CG Power after the TII buyout that has grabbed the spotlight. Another standout has been the performance of Cholamandalam Investment and Finance Co. Ltd, the group’s principal financial services arm, a listed company with over Rs 1 lakh crore market value.
The turbocharged value appreciation of a handful of group companies relative to others has led to serious differences among at least two of the three factions of the extended family. The argument is over how three equal groups can be carved out of the current corporate structure--collectively owned by seven branches of the Murugappa family through family holding company Ambadi Investment, which owns shares of various companies--without revising the terms of an older family agreement that has been in place
