Murugappa Family Pact Leads to Departure of Cholamandalam Investment Finance Director Vellayan Subbiah

Murugappa Group Realigns Ownership Across Key Companies

The Murugappa Group has reached a settlement among its promoter branches, paving the way for Vellayan Subbiah to consolidate his position in Tube Investments of India and CG Power and Industrial Solutions while relinquishing stake exposure linked to Cholamandalam Investment and Finance.

Under the agreement, finalized after more than two years of negotiations, Subbiah will retain and strengthen his alignment with Tube Investments and CG Power, including taking over or retaining stakes tied to those companies from within the extended promoter structure. This move forms part of a broader plan by the Murugappa family to separate ownership of the century-old conglomerate among three promoter factions while preserving business continuity.

The realignment follows prolonged internal discussions on how to divide the diversified business empire, which reported $9 billion in revenue in FY23. The negotiations had earlier run into hurdles due to sharp valuation divergence across group companies. The turnaround of businesses overseen by Subbiah, particularly CG Power, had become a key sticking point in share-swap discussions among family factions.

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Key Figures:

• $9 billion: Revenue reported by the Murugappa Group in FY23
• 51-52%: Promoter group's stake in Cholamandalam Investment
• ₹55,000-₹60,000 crore: Value of the promoter group's stake in Cholamandalam Investment
• 45-46%: Promoter ownership in Tube Investments
• ₹20,000-₹22,000 crore: Value of the promoter group's stake in Tube Investments
• 58-59%: Effective promoter group ownership in CG Power
• ₹45,000-₹50,000 crore: Value of the promoter group's stake in CG Power

The final arrangement appears to align ownership more closely with operational leadership, with Subbiah, a fourth-generation member of the family, credited with steering the revival of CG Power and expanding Tube Investments into new manufacturing and mobility segments. The Murugappa Group, which spans nearly 30 companies across various sectors, operates under a long-standing governance charter separating ownership from management.