Mumbai: Following a split in the 27-year-old locks-to-land development group, the Godrej family has agreed not to compete for six years, except in real estate. After the non-compete period, they can enter each other’s domains, but not under the Godrej name. 

As part of the family settlement agreement, Adi Godrej and his younger brother Nadir will be granted exclusive rights to use the Godrej brand in FMCG (cosmetics, cleaning supplies, toiletries, foods, beverages), financial services, pharmaceuticals, diagnostics, and chemicals businesses. 

Their cousin Jamshyd and his sister Smita Crishna will have exclusive rights to use the Godrej brand in the defense, consumer durables, medical devices, construction materials, interior design, electric mobility, software services, and security product industries. 

However, both groups may use the brand name in the real estate development and marketing industries. Jamshyd and Smita have real estate interests through the unlisted Godrej & Boyce, while Adi and Nadir own the listed Godrej Properties. 

None of the Godrej group companies will have to pay royalties on the brand. The non-compete clause went into effect on April 30. The agreement states that after six years, “a family group can enter  into the exclusive business of the other family group, without the use of the Godrej brand including in their corporate names.” 

Both groups, however, can venture into areas where neither has a presence, leveraging the Godrej brand with group-level differentiators, as these have been designated as shared business spaces.  

For example, medical services, hospitals, hospitality and education. 

Non-compete covenants are common in family settlement agreements. 

In March, the TVS family agreed to avoid competition for a set period. 

From promoters to public shareholders. 

Once the ownership realignment in the Godrej group’s listed entities is completed siblings Jamshyd and Smita Crishna will become public shareholders. 

They are currently part of the promoter group for listed Godrej entities. According to Sebi regulations, if a promoter wishes to be classified as a public shareholder, they cannot own more than 15% of a listed entity. According to the family settlement arrangement, Janshyd and Smita, classified as promoters once the realignment is completed, will apply for it.