Cholamandalam Investment and Finance Company shares declined sharply by more than 7% after reports suggested a major ownership reshuffle within the Murugappa Group promoter family. The development has triggered investor concerns over potential changes in promoter shareholding patterns and strategic alignment within the conglomerate.
According to a report by Moneycontrol, Murugappa Group scion Vellayan Subbiah has reached a settlement with other promoter branches to realign ownership across key group companies. The agreement is said to pave the way for Subbiah to give up stake exposure linked to Cholamandalam Investment and Finance while consolidating his position in Tube Investments of India and CG Power and Industrial Solutions.
The reported arrangement follows more than two years of negotiations within the Murugappa family. The restructuring forms part of a broader succession and ownership separation plan aimed at dividing the century-old conglomerate among three promoter factions, while ensuring operational stability and business continuity.
As part of the settlement, Subbiah is expected to relinquish his exposure to Cholamandalam Investment, which serves as the group’s flagship lending arm. In exchange, he is likely to retain and strengthen his alignment with Tube Investments of India and CG Power and Industrial Solutions. This may involve taking over or retaining promoter-linked stakes in these companies from within the extended family structure.
The internal realignment comes after prolonged discussions on how to divide the diversified Murugappa business empire, which reported revenues exceeding $9 billion in FY23. The conglomerate has historically operated under joint ownership spanning five generations through the family holding entity, Ambadi Investments.