Godfrey Phillips India shares rise as Bina Modi is reappointed managing director amid family feud

Godfrey Phillips India Limited, a prominent name in India’s tobacco industry, has become the center of attention following a dramatic boardroom battle resulting in significant leadership changes. At the recent Annual General Meeting (AGM), shareholders voted overwhelmingly in favor of reappointing Bina Modi as Managing Director, with 86.6% of votes supporting her return to power. This decision marks a crucial turning point in an ongoing family feud, pitting Bina Modi against her son, Samir Modi, over control of the company.

Power Play Unfolds in the Modi Family

Bina Modi’s reappointment comes amid a tense boardroom atmosphere, where family dynamics have significantly impacted the company’s governance. Charu Modi, Bina’s daughter, was also appointed to an executive role, further consolidating power within Bina Modi’s faction. The most striking move was the decision not to replace the seat vacated by Samir Modi, signaling his ousting from the board after his mandatory retirement by rotation. This power shift is not just a mere change in titles; it represents a deeper rift within the Modi family, one that has involved physical altercations and legal skirmishes, as suggested by allegations of assault filed by Samir Modi against Bina Modi’s security personnel.

Godfrey Phillips Shifts Focus, Exits 24Seven Retail Business

In a related move, Godfrey Phillips India has decided to exit the 24Seven retail business, a project initially spearheaded by Samir Modi. This decision, initially approved by the board in April 2024, became actionable following the lifting of an interim injunction. The move is seen as part of Bina Modi’s strategy to streamline operations and focus on the core business of tobacco and cigarette manufacturing. With the retail arm now set to be dismantled, the company appears to be realigning its resources and efforts towards its more profitable sectors.

Expert Opinion: Strategic Move or Governance Risk?

Market analysts view the reappointment of Bina Modi and the exit from 24Seven as strategic moves that could potentially boost the company’s profitability. The focus on the core cigarette business, which remains the most profitable segment for Godfrey Phillips India, could stabilize the company’s financials amid turbulent boardroom politics. However, some experts express caution, noting that the internal family disputes could pose long-term risks to governance and decision-making. The opposition from proxy advisory firms such as Glass Lewis to Bina Modi’s reappointment underscores these concerns, emphasizing the need for transparent governance practices in maintaining investor confidence.

Market Reaction and Investor Sentiment

Following these developments, Godfrey Phillips India’s stock has been under keen observation by investors and market watchers. The potential for improved profitability by focusing on core operations has led to positive sentiment in the market, with the company’s shares showing an upward trend. However, the underlying family conflict remains a concern for long-term investors who seek stability and consistent governance practices. As the company moves forward under Bina Modi’s leadership, it will be critical to see how it balances these internal challenges while delivering on strategic objectives.

A Pivotal Moment for Godfrey Phillips India

The recent decisions at Godfrey Phillips India, from leadership reappointments to strategic exits, reflect a company at a crossroads. Bina Modi’s leadership is now set to define the next chapter of the company’s growth, marked by a return to its core strengths in tobacco manufacturing while navigating complex internal family dynamics. As the dust settles on these dramatic boardroom changes, the company’s ability to deliver consistent returns to shareholders amid governance scrutiny will be closely watched.