Murugappa Group 3 returns to the right track to split negotiations

Mumbai: Discussions among the sponsors of the Murugappa Group have regained momentum, demonstrating the intentions of three different factions based on the legendary faction of Chennai to resolve differences about commercial valuations and promote differences among the three routes. Law firm Cyril Amarchand and Trading Plaza (a tax, regulatory and business consulting firm) have been working with the family to propose a separation structure that can be both legally acceptable and taxable to help dismantle its complex facilitator shares and cross-stakes in the family and ensure independent and cross-sex multinational corporations in the government and to ensure clarity in government, cross-span and cross-span data.
The evolving consensus includes granting the right to deny stock transfers for the first time and ensuring companies with higher valuations such as CG Power, India’s Tube Investments (TII), Cholamandalam and Shanti Gears -Gears -Contribute to achieve a fair settlement. Given the number of listed entities involved, the finalization clause will still be some time.
The group includes 11 publicly traded companies, including Carborundum Universal, Cholamandalam Investment and Finance Company, CG Power, Coromandel International, Eid Parry (India) and TII.

But family members who have taken a hard stance to date have “now eager to move forward to the resolution”, an experienced family business observer, as their anonymity remains in the family field.

Busy trading calendar
Murugappa Group has seen strong M&A activity and new investment announcements in recent months. There are also several unlisted companies and joint ventures. With the development of a new generation, the Murugappa family may also show openness and can continuously develop its traditional patriarchal approach.

In the August 23 edition, ET is the first to report a highly speculated transformation of CG Power within four years of the acquisition of group company TII. This led to a 70-fold increase in the share price of CG Power, which was acquired by TII, to Rs 8.56 respectively.

This asset has become a bone of debate among different family factions that make up the facilitator group. Perhaps unintentionally helps, the share prices of several group companies that have soared in the past 12-24 months have fallen. For example, TII stock has fallen 20% so far, while CG power has dropped 18% during the same period.

Until recently, the appreciation of value of a few group companies was at the heart of the dispute between at least two of the three factions of the extended family compared to other teams.

This argument is about how three equal groups can be carved out from the current corporate structure – owned by seven branches of the Murugappa family through family holding company Ambadi Investment, which owns stocks in various companies without modifying the terms of the old family agreement.

“The family is waiting for the two consultants to come up with a blueprint in the agreed formula,” said a family colleague. “As a consensus has been reached, it seems that all parties are more flexible now.”

A group spokesperson did not comment on the development.

Legal issues
The current solution comes after a major milestone reached in August 2023, when the family announced a resolution with Valli Arunachalam, daughter of late MV Murugappan. This marks the end of a long legal struggle, demonstrating a broader commitment to internal harmony.

Arun Alagappan, son of former chairman Ma Alagappan, may continue to lead Coromandel International. Vellayan Subbiah’s son, former MV Subbiah, is expected to retain control over Cholamandalam Investment and Finance, Cholamandalam MS MS Insurance and Cholamandalam Financial Holdings.

Along with Vellayan Subbiah, Arun Murugappan (Mam Arunachalam) was tilted to oversee the semiconductor venture investments of TII, TI Cycle, Shanthi Gears, CG Power, Ti Mobility and the group.