Cholamandalam Investment shares fall 2.5% as Vellayan Subbiah to exit as part of Murugappa family settlement

Cholamandalam Investment shares fall 2.5% as Vellayan Subbiah to exit as part of Murugappa family settlement

• Vellayan Subbiah to exit Cholamandalam, focus on Tube, CG Power
• Murugappa family splits ownership among three promoter factions
• Cholamandalam shares fall, Tube and CG Power shares rise

Did our AI summary help?

Shares of Cholamandalam Investment & Finance Company Ltd were trading 2.5% lower after Moneycontrol reported that Murugappa Group scion Vellayan Subbiah has reached a settlement with other promoter branches to re-align ownership across key group companies.

The agreement paves the way for him 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, Moneycontrol reported citing sources.

The arrangement, finalised after more than two years of negotiations, 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. Under the settlement, Subbiah is expected to relinquish exposure to Cholamandalam Investment — the group’s flagship lending arm — and instead 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, the people cited above said.

The realignment follows prolonged internal discussions on how to divide the diversified business empire — which reported more than $9 billion in revenue in FY23 — after five generations of joint ownership through family holding company Ambadi Investments.

At 10:45 am on February 26, Cholamandalam Investment & Finance Company Ltd shares were trading nearly 3% lower at Rs 1,703.4 apiece. Meanwhile, shares of Tube Investments were trading 2.5% higher at Rs 2,689.2 apiece while those of CG Power were trading 2% higher at Rs 727.6 apiece.

Subbiah holds a Bachelor of Technology in Civil Engineering from IIT Madras and an MBA from the University of Michigan. He has over 28 years of experience in varied fields such as consulting, technology, projects, financial services and engineering in senior positions across different industries.

In the afternoon trade, Cholamandalam Investments shares partially recovered from day's low after the company issued a clarification regarding its executive chairman.

In a clarification sent to both the BSE and the National Stock Exchange of India, the Murugappa Group company said it had received a statement from Subbiah’s office rejecting the report and affirming that he continues in his role for his approved five-year term from April 1, 2025 to March 31, 2030.

The filing added that there has been no change in management control or ownership structure across group businesses and that the existing leadership arrangement "continues unchanged." It reiterated that Subbiah and M A M Arunachalam oversee key group firms including Tube Investments of India, CG Power and Industrial Solutions and Cholamandalam Investment along with their subsidiaries.

Subbiah is the non-executive chairman of CG Power and Industrial Solutions Limited. He is also the non-executive vice-chairman of Tube Investments of India Limited.

Cholamandalam Investment has scaled into one of India’s most valuable non-bank lenders, with a market capitalisation exceeding ₹1 lakh crore. The uneven appreciation in these businesses complicated attempts to carve out three equal promoter blocs, with one faction seeking revisions to earlier share-swap assumptions and another resisting reopening agreed terms, people aware of the discussions said.

Promoter ownership across Murugappa companies is largely routed through holding vehicles rather than individual shareholdings, but the value concentration highlights why these three firms became central to the negotiations.

Subbiah, a fourth-generation member of the family, is widely credited within the group with steering the revival of CG Power and expanding Tube Investments into new manufacturing and mobility segments, making those businesses natural anchors for his promoter bloc under the new structure.