Godfrey Phillips India shares soar 5.5% after court lifts injunction on retail exit

Godfrey Phillips to go ahead with exit from retail business under 24Seven

Shares of Godfrey Phillips India Ltd surged over 200 points, or 5.50 percent, on the NSE following the company's announcement that it will proceed with its plans to exit the retail business under the ‘24Seven’ brand. This decision comes after a district court in the capital lifted an interim injunction that had previously blocked the move.

On June 27, 2024, a city court issued an injunction preventing the divestment of the retail business, based on an application from executive director Samir Kumaar Modi. However, the District Judge of South-East District at Saket Court, New Delhi, has now overturned this injunction in favor of the company, as per a regulatory filing.

The company is now moving forward with its exit strategy in line with the Board of Directors' decision made on April 12, 2024. The Board had approved the plan to divest from the retail division, subject to fulfilling the necessary formalities.

Previously, the District Judge had issued an ex-parte ad interim injunction on June 27, 2024, mandating the company to maintain the status quo regarding its retail operations. The following day, legal counsel for Samir Kumaar Modi delivered a copy of the order to the company.

For the fiscal year 2023-24, revenue from the retail division amounted to Rs 403 crore, representing 7.6% of the company’s total revenue. This division had a negative net worth as of March 31, 2024.

The Board's decision to exit the retail business was based on a comprehensive review of stakeholder feedback, the division’s long-term performance, current market conditions, and the company’s overall business strategy.

In a related matter, Samir Modi has been embroiled in a boardroom dispute with his mother, Bina Modi, and has even accused her of orchestrating an attack on him during a company board meeting. Modi filed a complaint with the Delhi Police alleging that he was prevented from attending the board meeting scheduled for May 30 and was assaulted by Bina Modi's personal security officer.

Godfrey Phillips India, the flagship company of Modi Enterprises, is known for its popular cigarette brands, including Four Square, Red and White, Cavanders, Tipper, and North Pole. The company also manufactures and distributes Marlboro under a licensing agreement with Philip Morris.